Experts raise alarm as NASS approves N9trn increase in 2026 budget, fresh $6.9bn loan
Experts raise alarm as NASS approves N9trn increase in 2026 budget, fresh $6.9bn loan
By Idun Maximus
Economic experts have raised the alarm that the proposed N9 trillion increase to the 2026 budget,
from N58.4 trillion to N67.4 trillion by President Bola Tinubu could box Nigeria into a debt trap if a clear, sustainable debt repayment framework is not designed and diligently implemented.
Aside from deepening Nigeria’s debt crisis, the analysts also said new borrowing could trigger higher taxes and worsen inflationary pressures across the economy.
Their worries also extend President Tinubu’s loan request to establish a structured total return swap external financing programme of $5, 000,000,000 with First Abu Dhabi Bank, to Support Federal Government Funding and Fiscal Liquidity Management and $1,000,945,693.55 UK Export Finance (UKEF) covered Loan Facility Arranged by Citibank, for the rehabilitation of seaports.
The President wrote to the National Assembly on Tuesday, where he sought lawmakers’ nod to take in more loans.
However, economists who spoke on the development expressed concern that the move could further strain an already fragile economy.
A lecturer in the Department of Economics at the University of Lagos, Prof. Femi Saibu, warned that increasing the fiscal deficit amid rising inflation would compound existing economic pressures.
He noted that the rising cost of living, which he said has increased significantly in recent years, reflects the hardship already faced by households, stressing that injecting more money into the system without a corresponding increase in goods and services would fuel inflation.
Saibu added that the burden of financing the expanded budget would ultimately fall on citizens, either through direct taxation or reduced welfare. He advised the government to focus on reducing the cost of governance rather than expanding spending, warning that persistent reliance on deficit financing would worsen economic hardship.
He also linked the proposed increase to pre-election spending patterns, noting that such fiscal expansions are common in election cycles but often do not translate into meaningful improvements in citizens’ welfare.
According to him, “when we are talking about inflationary challenges and the government still engaging in more deficits, it is going to have implications on the already existing pressure on the economy. We should not deceive ourselves with the recalibrated inflation rates.
“If we look at it very well, when you consider households now, there’s a report that says that within a few years, the cost of living has increased by 250 percent. So, this means there is pressure, and you are also pushing more money into the system without a corresponding increase in goods and services.
“So, number one, this is going to be inflationary. Number two is that it is increasing the indebtedness of Nigerians. That money will either come from another loan or through increased taxes, higher fuel prices, increased interest rates, or one way or the other, the government will raise that money by reducing the welfare of the people.
“So, rather than increasing the fiscal deficit, the government can contain the cost of governance such that it will spend less on what it is doing. I don’t think increasing the deficit now is the best way to go when the economy is already over-liquid.
“Also, we are moving towards an election year. Obviously, such should be expected from governments that have a taste for higher spending, and that is just what is happening. I am not seeing any significant change in the welfare of people because of this incremental change. To me, it is a way of filling shortfalls in expected expenditure, not necessarily in terms of providing additional services to the people.
“If you look at the reasons given for implementing the budget increase, I wonder what that is going to achieve. So, this is another way of the government spending money on problems that are not really issues of funding. The reason for the increment, to me, is not really economic.
“Therefore, we should not expect much from it. However, we should expect higher taxes or a reduction in some of the benefits people are currently enjoying in order to pay back, either today or tomorrow. People are going to pay for this, and those paying may not be the ones who benefit.
“My request to the government is that rather than increasing spending, it should focus on reducing the cost of governance. That will help reduce the fiscal deficit and dependency on borrowing. The idea of increasing deficits whenever there is a shortfall, just to raise more money, is going to worsen the pain of the people. I don’t see that as the best way.”
On his part however, an economist and development expert, Dr. Aliyu Ilias, endorsed the move, saying that a larger budget is not entirely unexpected given current economic realities.
Ilias pointed to rising oil benchmark assumptions and global uncertainties, including tensions in the Middle East, as factors influencing the government’s decision.
He added that increased spending in an election year could drive visible projects and boost public confidence, noting that such expansions are often part of broader economic strategies.
The expert further dismissed concerns that the budget increase would necessarily worsen inflation or destabilise the macroeconomic environment.
“The budget may be small compared to what the government is actually expecting. You will also remember that the oil benchmark has increased because of the Iran-Israel war. There is also volatility in the economy now, so our debt servicing burden is high.
“If you look at it very well, they said capital projects were reduced significantly compared to previous years. So, looking at it, we are proponents of a bigger budget, even though we need to work on our revenue side. So, I think it is not bad.
“It is expected that they are going to increase it. You also recall that this is an election year, so the government needs to execute projects that people will appreciate. They also want to show people that they are delivering.
“We are yet to clearly see the areas where the budget is being increased, but I think it is expected, and it is not bad. It should be to the benefit of Nigerians. Budget increases do not necessarily have anything to do with inflation”, he stated.
Also speaking, the Project Lead, Calabar and Gulf of Guinea Municipal and Trade Centre Limited by Guarantee, David Etim, explained that the increase in living costs due to the Gulf war has impacted the global economy.
“The cost of everything has increased significantly, at least by 100% worldwide. So, the government looking to increase the budget by this figure is not, to me, unexpected. However, a budget is only an estimate, it is a plan, a proposal for expenditure. If that budget is not funded, it amounts to nothing. The budget is purely a proposal, and the expenditure can only be realized when it has cash backing.
“For me, the government’s or the president’s decision to request an additional N9 trillion in the 2026 budget is fine. My concerns are: What will the money be used for? How will this additional N9 trillion be funded? How realistic is the funding proposal?
These are the key issues. Once we can see the funding mechanism to raise the N9 trillion, understand how it will be utilised, and monitor the implementation, then we can determine whether the increase makes sense or not”, he said.
In his views, Vice Chairman, Board of Directors, Highcap Securities, David Adonri, noted that expanding the budget could worsen Nigeria’s fiscal deficit.
“I will say that an increase in expenditure of this magnitude, without a commensurate rise in revenue, will inevitably lead to higher borrowing. That raises concerns about debt sustainability.
“It is not news that Nigeria’s fiscal space remains constrained with debt servicing already consuming a significant portion of government revenue. Also,
there is always the risk of crowding out when government borrowing rises. Banks may prefer to lend to the government because of lower risk, which could limit credit to businesses”, he said.
The House of Representatives has passed a total budget of N68,303,309,818,667 appropriation for the 2026 fiscal year, ending on December 31, 2026. It also extended the implementation of the capital component of the 2025 budget from March 31 to June 30, 2026.
The 2026 budget was passed at Tuesday’s plenary, after the report of the House Committee on Appropriation, was considered and approved at the Committee on Supply, jointly chaired by the speaker, Tajudeen Abbas and Deputy Speaker, Benjamin Kalu.
A breakdown of the budget indicated that N4,799,628,911,806 is for statutory transfers; N15,809,361,631,657 for debt servicing; N15,427,257,802,407 recurrent (non debt expenditure) and N32,267,061,472,797 for capital expenditure.
President Bola Tinubu had in December 2025 presented a budget proposal of ₦58.18 trillion titled “Budget of Consolidation, Renewed Resilience and Shared Prosperity,” for the 2026 fiscal year to a joint session of the National Assembly. According to the President, the budget proposal is designed to consolidate recent economic reforms and translate stabilising macroeconomic indicators into improved living standards for Nigerians.
For statutory transfers, the National Judicial Council(NJC) got N610,170,665,073; Niger Delta Development Commission (NDDC)N 618,127,393,490; South East Development Commission (SEDC) N 140,000,000,000; North West Development Commission (NWDC) N145,606,921,550; South West Development Commission(SWDC) N140,000,000,000; South South Development Commission (SSDC)N 140,000,000,000; North Central Development Commission (NCDC) N140,000,000,000 and North East Development Commission (NEDC) N244,066,466,734.
Similarly, the National Assembly got N577,852,880,669; Universal Basic Education Commission (UBEC) N490,283,091,346 and the Independent National Electoral Commission (INEC) N1,013,778,401,602.
For capital expenditure, the Presidency got N147,859,795,959; Ministry of Defence N466,304,756,899; Ministry of Police Affairs N 61,463,608,673; Ministry of Agriculture and food security, N 3,259,020,420,697, Ministry of Power N434,673,108,221 , Ministry of Works N 3,174,611,665,457; Ministry of Education N 655,823,091,110 and Ministry of Health and Social Welfare N1,225,103,984,786.
In a related development, the House considered and approved President Tinubu’s request to Establish a Structured Total Return Swap External Financing Programme of $5, 000,000,000 with First Abu Dhabi Bank, to Support Federal Government Funding and Fiscal Liquidity Management and $1,000,945,693.55 Uk Export Finance (UKEF) covered Loan Facility Arranged by Citibank, for the Rehabilitation of Ports Project.
The two requests were conveyed to the House in a letter by the President, which was read by Abbas at Tuesday’s plenary, and thereafter referred to the House Committee on Aids, Loans and Debt Management, which submitted its reports to the Green Chamber a few hours later.
The report on the $ 5billion First Abu Dhabi Bank Facility, which was presented by the committee chairman, Abubakar Hassan Nalaraba recommended “the implementation of a total return swap transaction involving the Federal Government of Nigeria (FGN) and First Abu Dhabi Bank PJSC (FAB) in aggregate principal amount of up to $5, 000,000,000 (five billion, USD) (“the Transaction”) together with the collateralization of the Transaction by the issuance of Naira denominated FGN Securities to First Abu Dhabi Bank PJSC (FAB) as collateral for the loan of up to 133.3% of the amount drawn
“That the Federal Government of Nigeria makes Margining payments to First Abu Dhabi Bank PJSC (FAB) in USD (Cash) upon demand if at any time, either due to fluctuations in the market prices of the FGN Securities or as a result of movements in Exchange Rate or both, the value of the collateral issued to FAB falls below the initial value at the time of issuance;
“That the five billion, USD should be drawn down in Tranches with each tranche comprising of a corresponding Confirmation and other ancillary agreements (as may be required) between the Federal Government of Nigeria and First Abu Dhabi Bank PJSC (FAB);authorization of the use of proceeds for Budget implementation, Development of key infrastructure projects, which are of priority to the administration, Repayment of relatively more expensive domestic and external debts in the Federal Government of Nigeria public debt portfolio.”
The report on the UKEF covered facility, which was also presented by Nalaraba recommended that the House “approve a UK Export Finance (UKEF) Covered loan facility arranged by CITI Bank, N. A. London Branch and/ or other financial institutions in the sum of USD 1,000,945,693.55 (one billion, nine hundred and forty-five thousand, six hundred and ninety-three USD, fifty-five Cents) for the Rehabilitation and reconstruction of the Lagos Port Complex and the Tin Tincan island port complex in Nigeria.”
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2027: Fresh fears in ADC over plots by presidency to discredit party leaders
By Muhammed Sule
There are fresh indications over alleged plot by the presidency to discredit the leadership of the opposition coalition party, the African Democratic Congress (ADC) ahead of next year’s general elections.
Raising the alarm in Abuja, a Civil Society Organisation (CSO), claimed that the intimidating rising profile of the ADC, especially in the Northern part of the country, has unsettled and upset the presidency.
The CSOs under the platform of Nigeria Democratic Rights Advocacy (NDRA), in a statement by the Secretary-General, Julius Aondowase, noted that their claim was based on credible intelligence.
They noted that a particular prominent appointee of APC administration from the northern region has initiated moves through the involvement of several Senior Advocates of Nigeria and members of the Bench to firm strategies that will hinder the ADC from participating in the upcoming general elections next year.
“We have it from a reliable source that a meeting was convened on Monday with senior legal minds in Abuja.
“The purpose of the meeting is to explore all possible options that would compromise the judicial system to stop the ADC from participating in the election next year.
“We are also aware that the decision to get the ADC off the ballot in the upcoming election was handed down to the Northern top politician in the presidency.
“It is the last joker by the ruling party, the All Progressives Congress to ensure a system of control over all viable opposition parties ahead of the election next year.
“After failing in the attempt to compromise the leadership structure of the ADC, the ruling party has now resorted to the last option of using the judicial process to stop the ADC,” the statement claimed.
The NDRA specifically claimed that the ongoing litigation challenging the authenticity of the Senator David Mark-led National Working Committee of the ADC is being orchestrated by the ruling party.
“It is clear to us that the APC is the brain behind the sinister conspiracy to disqualify the David Mark leadership of the ADC, with the sole purpose of submitting the ADC to the whims of the ruling party.
“We make particular reference to a letter threatening the chairman of the Independent National Electoral Commission, dated 28 March, 2026 asking that INEC should desist from recognizing the current leadership of the ADC,” the statement added.
Aondowase, however noted that the NDRA is actively working with other civil rights organizations and professional bodies across the country, and is putting the relevant countries in notice through their embassies in Nigeria, that any attempt to cancel active opposition in Nigeria would be rejected and resisted.
He said further that the plan by the government was to effect the delegitimization of the ADC through what he called the obnoxious revised Electoral Act, which would technically disenfranchise opposition leaders in the ADC, locking them out of contesting in the 2027 general elections.
“The script that is being played by the government is clear: lock out all potential opponents against the ruling party and only the pliable opposition will be allowed to contest in the elections.
“Their agenda is to use the judiciary to eliminate the ADC, which is the most credible opposition party and by extension, through the instrumentality of the jaundiced Electoral Act amendment, disenfranchise all potential opponents of President Bola Tinubu.
“All civil society groups in Nigeria and concerned stakeholders in the democracy of this country are on red alert. The action to compromise our democracy and make the APC the only option on the ballot without a choice of a credible opponent will not be tolerated or accepted.
“We are by this press statement, therefore, calling the attention of all stakeholders, foreign governments and the generality of the masses of Nigeria to the machinations of the APC to cancel credible opposition, specifically the ADC from participating in the elections next year.
“We also send a note of warning that those involved in this plot to put their focus squarely on the job of providing adequate security and welfare for the people of Nigeria who are daily being attacked, maimed and unalived by ravenous bandits and criminals”, the group noted.
