Nigeria’s budgets must be harmonised across fiscal years, says Rewane

The Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, has expressed the need for Nigeria budget to be harmonised across fiscal years, stressing that the 2025 budget, supplementary budget and the 2026 budget should be aligned and adjusted to deal with reality rather than overly optimistic assumptions.

Rewane stated this on Saturday in Lagos while speaking at the RCCG LP 35 Economic Summit, warning that fiscal credibility depends on aligning projections with prevailing macroeconomic conditions.

Rewane, while presenting an outlook on Nigeria’s growth, fiscal position, exchange rate dynamics and monetary policy trajectory, said Nigeria’s budgets must be harmonised across fiscal years, stressing that the 2025 budget, supplementary budget and the 2026 budget should be aligned and adjusted to deal with reality rather than overly optimistic assumptions.

“The US dollar is going to be weakened because of various forces. Don’t forget that in the U.S. this month, there will be a Federal Reserve meeting in which some things are going to happen on the interest rates, and it’s going to drive some other things. So we expect a weaker U.S. dollar this year relative to other currencies. We expect a gradual easing of the MPR in Nigeria this year relative to other competitors and neighbouring countries. I’ve said the budget will be right-sized. We expect the oil price, which is today at $63, $64 a barrel, to come down to $58 or $60 max, and that has a significant impact on our economy,” he said.

He, however, urged the Federal Government to right-size Nigeria’s budgets to reflect economic realities.

The National Assembly repealed and re-enacted the 2024 and 2025 Appropriation Acts, while President Bola Tinubu presented a N58.18trillion 2026 Appropriation Bill to a joint session last year.

The proposed 2026 budget includes total expenditure of N58.18trillion against an expected revenue of N34.33trillion, with capital expenditure at N26.08trillion, recurrent non-debt expenditure of N15.25trillion, debt servicing at N15.52trillion, and a budget deficit of N23.85trillion.

The 2026 proposed budget consists of total expenditure of N58.18trillon and expected revenue of N34.33trillion. Capital expenditure is estimated at N26.08trillion while recurrent non-debt expenditure stands at N15.25trillion. Debt servicing is projected at N15.52trillion, with a budget deficit of N23.85trillion.

The 2026 budget is pegged on the assumptions of crude oil benchmark of $64.85 per barrel, daily oil production of 1.84 million barrels, and an exchange rate of N1,400 to the US dollar.

Nigeria is also currently running overlapping budgets, a scenario which the president vowed to end by March 31, 2026, when he said all capital liabilities from previous years will be fully funded and closed.

Rewane noted that investment levels also decline after taxation, while government consumption is projected to rise sharply, signalling a short-term shift in resource allocation. He warned that without budget right-sizing, this shift could worsen fiscal pressures, especially in an environment of declining oil prices and rising deficits.

Rewane further linked budget right-sizing to monetary and exchange rate stability, noting that fiscal realism supports the Central Bank’s efforts to stabilise the naira, manage inflation expectations and narrow the gap between official and parallel market exchange rates.

He added that while the International Monetary Fund has projected Nigeria to record GDP growth of about 4.4 per cent, higher than population growth, fiscal imbalances, election-year pressures and lower oil revenues make prudent budgeting unavoidable.

On the broader outlook, Rewane said interest rates are expected to ease gradually, inflation to slow, and the naira to experience only moderate depreciation, provided fiscal and monetary authorities maintain discipline with opportunities projected in agro-processing and other sectors.

“Major reforms, new tax law, power sector forbearance, 7.5 per cent VAT on service fees, institutional reform, bank, insurance, pension and capital market recapitalisation will take place in 2026. What are the opportunities? Agricultural processing. We expect to be driven by another N4trillion projected revenues from that area, constrained by insecurity, weather, and global warming. We also expect that for manufacturing, we expect FMCGs to generate N2.5trillion.

“For telecommunication, it is very important. We also expect the FinTech and technology space to generate about N2.97trillion. Risks are the threat of expansion, technical delays, inflation, and, finally, renewable energy, oil and gas, AI, power, and so on. Trends to watch, simply remember that the spillover effect of the global crisis into Nigeria”, he added.