Senate approves 2026-2028 MTEF/FSP with new borrowing plan of ₦17.88trn

The Senate has approved the 2026-2028 Medium-Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).

The upper chamber approved the expenditure framework, with a total spending of ₦54.46 trillion and a new borrowing plan of ₦17.88 trillion, which comprises both domestic and foreign borrowings.

Under the approved framework, projected revenue stands at ₦34.33 trillion, while debt servicing is estimated at ₦15.52 trillion. Capital expenditure is pegged at ₦20.131 trillion, while pensions, gratuities, and retirees’ benefits amount to ₦1.376 trillion.

Statutory transfers are projected at ₦3.152 trillion, while the sinking fund stands at ₦388.54 billion. Total recurrent (non-debt) expenditure is estimated at ₦15.265 trillion. Special interventions for recurrent and capital expenditure are pegged at ₦200 billion and ₦14 billion, respectively.

The approval followed the consideration of a report presented by the Chairman of the Senate Committee on Finance, Sani Musa, during the plenary on Tuesday.

The MTEF is a projection of the federal government’s three-year spending plan. The nation’s budget is predicated on this framework.

The framework was considered at the Senate Committee on Supply chaired by the Senate President, Godswill Akpabio.

President Bola Tinubu transmitted the 2023-2028 rolling plan to the National Assembly for approval last week, and it was read on the floor of the Senate last Thursday.

The proposal was subsequently referred to the Senate Committee on Finance for further action.

The committee held a public hearing on the framework on Monday, during which members of the federal government’s economic team addressed lawmakers’ concerns on borrowing, foreign exchange projections, and other macroeconomic assumptions.

Resolution

The Senate approved the framework, which includes exchange rate benchmarks of ₦1,512/$1 for 2026, ₦1,432.15/$1 for 2027, and ₦1,383.18/$1 for 2028.

Oil price benchmarks were set at $60 per barrel for 2026, $65 per barrel for 2027, and $70 per barrel for 2028.

Domestic crude oil production is projected to be 1.84 million barrels per day (mbpd) in 2026, 1.88 mbpd in 2027, and 1.92 mbpd in 2028.

Inflation is projected at 16.5 per cent in 2026, 13 per cent in 2027, and nine per cent in 2028, while GDP growth rates are estimated at 4.68 per cent, 5.96 per cent, and 7.9 per cent for the respective years, in anticipation of gains from the tax reforms.

Debate

Borno North Senator, Tahir Monguno, said the MTEF/FSP is subject to review whenever the need arises, adding that the figures contained in the framework are realistic and achievable within Nigeria’s current economic realities.

Lagos East Senator, Adetokunbo Abiru, noted that the framework reflects Nigeria’s gradual shift away from oil dependence as a major revenue source, describing the development as positive for the country.

Similarly, Adamawa Central Senator, Aminu Abbas, said the projections in the framework are realistic, noting that the exchange rate assumptions align with prevailing market conditions.