The Senate has revised downward the crude oil price benchmark for the 2026 fiscal year, reducing it from $64.80 to $60 per barrel in the proposed ₦54.46 trillion Federal Government budget framework. Aside from this adjustment, lawmakers retained all other macroeconomic and fiscal assumptions outlined in the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper.
The decision was taken on Tuesday, December 16, 2025, following the consideration of a report submitted by the Senate Committee on Finance, chaired by Senator Sani Musa (Niger East). Presenting the report, Musa explained that the adjustment was driven by current global developments, including ongoing geopolitical tensions in Europe and the Middle East, which have contributed to uncertainty and volatility in international crude oil markets.
According to the committee chairman, the Senate considered it safer and more realistic to adopt a conservative oil price benchmark in light of the fragile global energy environment. He noted that the revised figure reflects caution and fiscal responsibility, given how sensitive crude oil prices are to external shocks.
While lowering the benchmark for 2026, the Senate approved revised projections for subsequent years. The oil price benchmark for 2027 was adjusted upward from $64.30 to $65 per barrel, while the 2028 projection was increased from $65.50 to $70 per barrel. Despite the downward review for 2026, lawmakers maintained confidence in Nigeria’s oil production capacity, retaining output projections of 1.84 million barrels per day for 2026, 1.88 million barrels per day for 2027 and 1.92 million barrels per day for 2028.
The upper chamber attributed this optimism to ongoing reforms in the oil and gas sector, as well as sustained efforts by the government to curb production losses and stabilise output.
On broader macroeconomic assumptions, the Senate endorsed projected exchange rates of ₦1,512 per dollar in 2026, ₦1,432.15 in 2027 and ₦1,383.18 in 2028. The committee stated that these figures are consistent with the Central Bank of Nigeria’s policy direction, which aims to strengthen the naira through closer coordination between fiscal and monetary authorities.
Inflation is expected to ease gradually over the medium term, with projections of 16.5 per cent in 2026, 13 per cent in 2027 and nine per cent in 2028. These estimates, according to the committee, are anchored on the monetary authorities’ commitment to tightening policies and addressing inflationary pressures.
The Senate also upheld real Gross Domestic Product growth projections of 4.68 per cent for 2026, 5.96 per cent for 2027 and 7.9 per cent for 2028. Lawmakers cited ongoing economic reforms and the anticipated impact of newly enacted tax laws—expected to gain stronger traction from 2026—as key drivers of improved economic performance.
A significant aspect of the report was the emphasis on effective implementation of the new Tax Acts as essential tools for economic reform, revenue mobilisation and sustainable development. In this context, the committee recommended that the Federal Government introduce a National Scanning Policy under the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies. The policy, the report noted, would enhance revenue assurance, facilitate trade, minimise leakages, improve transparency and strengthen national security.
Regarding fiscal operations, the Senate approved total expenditure of ₦54.46 trillion for the 2026 budget. Retained revenue is estimated at ₦34.33 trillion, while new borrowings—both domestic and external—are projected at ₦17.88 trillion. Debt servicing is expected to cost ₦15.52 trillion.
The framework also makes provisions of ₦1.376 trillion for pensions, gratuities and retirees’ benefits, with the overall fiscal deficit estimated at ₦20.13 trillion. Capital expenditure, excluding transfers, was maintained at ₦20.131 trillion, alongside statutory transfers of ₦3.152 trillion and a Sinking Fund allocation of ₦388.54 billion. Total recurrent (non-debt) expenditure was approved at ₦15.265 trillion, while special intervention funds were set at ₦200 billion for recurrent spending and ₦14 billion for capital projects.
In its closing remarks, the Senate Committee on Finance commended the leadership of the Senate and committee members for their dedication to what it described as a vital national responsibility. The committee expressed confidence that the approval and effective execution of the framework would help lay the foundation for sustained economic growth and long-term prosperity.
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