Daniel Adaji
President Bola Tinubu’s 2026 Appropriation Bill and the Central Bank of Nigeria’s (CBN) Macroeconomic Outlook for 2026 have revealed sharp differences in projected revenue, expenditure and fiscal deficit.
This disparity has raised concerns about alignment between Nigeria’s fiscal and monetary authorities at a time of fragile macroeconomic recovery.
Documents obtained from the Budget Office of the Federation show that the Federal Government, under Tinubu’s proposal, plans to spend ₦58.47 trillion in 2026 against projected revenue of ₦33.19 trillion, leaving a fiscal deficit of ₦25.27 trillion.
In contrast, the CBN’s 2026 Macroeconomic Outlook projects a more restrained fiscal position, with ₦35.51 trillion in retained revenue, ₦47.64 trillion in expenditure and a significantly lower deficit of ₦12.14 trillion, estimated at about 3.01 per cent of GDP.
The divergence in figures has triggered fresh questions about the coherence of Nigeria’s fiscal planning and the effectiveness of fiscal-monetary coordination repeatedly emphasised by policymakers.
Under Tinubu’s proposal, total expenditure of ₦58.47 trillion is driven largely by debt servicing, recurrent obligations and capital spending, the budget allocates ₦15.91 trillion to debt service, representing more than 27 per cent of total spending, ₦15.25 trillion to recurrent (non-debt) expenditure,
₦23.21 trillion to capital expenditure and
₦4.10 trillion to statutory transfers.
Debt service alone exceeds the entire capital budget of several previous fiscal years, underscoring the growing weight of public debt on federal finances. Domestic debt service, including Ways and Means advances, accounts for ₦10.16 trillion, while foreign debt service stands at ₦5.36 trillion, with an additional ₦388.54 billion earmarked for sinking fund obligations.
On the revenue side, the Tinubu administration expects to raise ₦33.19 trillion, drawing from a mix of federation revenues, independent revenues, government-owned enterprises (GOEs), aid and grants, and other inflows.
Key revenue components include, ₦23.09 trillion as the Federal Government’s share of gross federation revenues, ₦4.31 trillion from independent revenues, ₦4.98 trillion from GOEs’ net operating surplus, ₦1.37 trillion from aid and grants and ₦1.99 trillion from other sources, including development levies and recoveries.
Despite these inflows, expenditure outstrips revenue by a wide margin, resulting in a ₦25.27 trillion deficit, one of the largest nominal deficits in Nigeria’s fiscal history.
The government plans to finance the shortfall mainly through new borrowing of ₦23.04 trillion, alongside ₦189.16 billion from asset sales and privatisation and ₦2.05 trillion from multilateral and bilateral project-tied loans.
The CBN’s outlook presents a markedly different picture. According to the apex bank, retained revenue is expected to rise to ₦35.51 trillion in 2026, buoyed by sustained non-oil revenue mobilisation, improved tax administration following the Nigeria Tax Act 2025, and deeper implementation of the Petroleum Industry Act (PIA) 2021.
Expenditure, however, is projected at ₦47.64 trillion, more than ₦10 trillion lower than the figure in the appropriation bill. This results in a projected deficit of ₦12.14 trillion, less than half of the executive’s estimate.
The CBN argues that this fiscal path is more consistent with macroeconomic stability and debt sustainability, projecting public debt to rise moderately to 34.68 per cent of GDP by end-2026, compared with 33.98 per cent as of mid-2025.
Different macroeconomic assumptions
Beyond fiscal arithmetic, the two documents are anchored on different macroeconomic assumptions.
The CBN projects real GDP growth of 4.49 per cent in 2026, up from an estimated 3.89 per cent in 2025, driven by non-oil sector expansion, improved oil production of about 1.71 million barrels per day, and ongoing structural reforms.
Inflation is projected to moderate sharply to an average of 12.94 per cent in 2026, supported by easing food and energy prices and the lagged effects of tight monetary policy. External reserves are forecast to rise to US$51.04 billion, while exchange rate stability is expected to be reinforced by stronger remittances, oil receipts and capital inflows.
The spending profile in the appropriation bill, particularly heavy borrowing, large wage-related arrears and expansive capital commitments, raises questions about whether these disinflation and stability assumptions can be sustained.
The gap between the Tinubu administration’s budget figures and the CBN’s projections has reignited debate over policy coordination between agencies responsible for fiscal management and those charged with safeguarding macroeconomic stability.
While the CBN repeatedly stresses the need for “harmonised fiscal and monetary policies,” the contrasting deficit and expenditure numbers suggest that both sides may be working with different assumptions about revenue performance, borrowing limits and spending restraint.
For investors and analysts, the implications are significant.
A higher deficit trajectory, as implied by the budget, could intensify borrowing, crowd out private sector credit and complicate the central bank’s transition toward a full inflation-targeting framework.
However, policy analysts warn that the stark contrast between the two documents highlights deeper structural coordination failures. Commenting on the divergence, policy analyst Victor Agi said, “The ideal situation is that there should be some kind of harmonisation between the fiscal and the monetary policy of the country. And so they are not supposed to work in on the opposite side. And the problem really is that maybe the fiscal side may be speaking from a place of reality, while the monetary side may be projecting from a place of making the country look good to the face of the investors and of course the international community and all of that.”
Agi argued that the consequences of this disconnect often become evident at the end of the fiscal year.
“But the implication which we have continued to see every year is that at the end of the year, so when they are taking stock, who eventually is right. And we have seen over time that as a matter of none of them become right at the end of the day, because we see how that deficit continues to go and the country continues to borrow, to fund the budget despite as of last year august,” he said.
He recalled that despite assurances of strong revenue performance, borrowing pressures persisted.
“I remember the president coming to say that the country has exceeded its revenue expectation for the year. And between that august and the end of the year December, I still recall the president going to the National Assembly to request the National Assembly to approve some borrowings.”
According to Agi, these recurring developments reflect deeper governance issues. “So all of this speaks to how disjointed, the fiscal and the monetary policy of the country have become. And speaks to what is only the country management of its monetary and fiscal policy is, you know, in the face of all of the reality that we continue to see every day.”
He warned that the lack of alignment remains a major concern. “It calls for concern that there is no harmonization between what the monetary guys are saying and what the fiscal guys are saying. They are not supposed to be working in variance. They are not supposed to be working in contradiction.”
Agi stressed that closer coordination is essential for credibility. “They are supposed to be working together. You know, so that of course we have an harmonizing monetary policy as it were, but it’s a problem that has continued.”
He also pointed to implementation delays as further evidence of policy dislocation. “I don’t know if you are aware, of course, many people are aware that at some point last year, there was three implementing the 2024 budget, I mean, up to the end of last year. I’m not sure we have even started implementing 2025 budgets, you know, releasing money for it, basically.”
In his view, the current framework falls short. “So it’s a lot of disjointed policy and at some point, hopefully, maybe we’ll get it right, but currently what we have is not good enough.”
An economist, John Idris, said the gap between the two projections signals unresolved credibility issues in Nigeria’s fiscal framework. “When the budget deficit in the appropriation bill is more than double what the central bank is projecting, it tells investors and markets that there is no single fiscal anchor guiding policy,” Idris said.
