Senate on Thursday threatened to reduce the proposed N58.472 trillion 2026 Appropriation Bill over what it described as unrealistic revenue projections, poor oil performance benchmarks, and persistent failures in capital budget implementation.
The warning came during a tense interactive session between Senate Committee on Appropriations and the federal government’s economic team, where lawmakers openly questioned the credibility of key assumptions underpinning the record budget proposal.
In a related budget defence development earlier, National Assembly proposed a take-off grant of N1.5 trillion for Federal Ministry of Art, Culture, Tourism and the Creative Economy (FMACTCE) to reposition the sector as a key driver of economic diversification and reduce Nigeria’s dependence on oil revenue.
The proposal was unveiled during the ministry’s 2025 budget defence before the Joint Committee on Culture, Art and Creative Economy. During the session, lawmakers expressed strong confidence in the sector’s capacity to generate massive revenue, create jobs, and earn foreign exchange, if properly structured and funded.
In her presentation, Minister of Art, Culture, Tourism and the Creative Economy, Hannatu Musa Musawa, projected that the sector could contribute $100 billion to Nigeria’s Gross Domestic Product (GDP) and generate over 2.5 million jobs by 2030.
Chairman, Senate Committee on Appropriations, Senator Solomon Adeola (Ogun West), questioning the credibility of key assumptions underpinning the federal governments 2026 budget proposal, said budget document originated from the executive and must reflect realistic and implementable projections.
Adeola expressed concern over what he called a recurring gap between projected and realised oil revenues, citing instances of 18 per cent performance in one fiscal year and 36.5 per cent in another, figures far below expectations.
“How do we explain this level of underperformance?” Adeola asked.
He added, “Do we reduce this N58.472 trillion budget or proceed and make adjustments? If we are not reducing it, then you are telling Nigerians you will meet these targets.”
He warned that with Nigeria’s debt stock hovering around N152 trillion and debt servicing costs consuming a significant portion of revenue, the legislature would not rubber-stamp projections that could worsen fiscal pressures.
Adeola suggested that strategic asset sales could help cut down the debt portfolio and reduce future borrowing costs. He stressed that the National Assembly required clarity on whether the revenue figures presented were for the federation or strictly for the federal government.
First to face scrutiny was Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who defended the oil production benchmark of 1.84 million barrels per day as a “stretch target” designed to drive performance.
Edun said, “It is a stretch target so that authorities do not settle for lower output.”
He added, “But as long as we do not spend what we do not have, we are within safe limits.”
He maintained that security spending had been prioritised under the 2026 proposal, disclosing that emergency funding has been released for critical military procurements, including foreign acquisitions.
Edun stated, “We all agree that security is to be prioritised. Emergency funding has been given. Critical foreign payments for security equipment have been made, at least twice this year, including as recently as on Thursday.”
Edun also said Nigeria’s debt challenge was less about the debt-to-GDP ratio and more about the high pricing of debt for developing countries in international markets.
According to him, Nigeria is currently chairing a technical group meeting of the G24, where debt sustainability and high interest rates remain dominant concerns.
He said the economy was showing signs of recovery, with growth of about four per cent, easing inflationary pressures, improved foreign reserves, and greater exchange rate stability.
The minister added that renewed investor confidence, including a reported $20 billion commitment by Shell, signalled positive momentum.
Chairman of Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, appeared to align partially with lawmakers, cautioning that unrealistic revenue assumptions inevitably undermine budget performance.
Adedeji said, “Budget efficiency is not in the size of the budget; it is in what you can implement. If we think we have 10 naira and we plan with 100 naira in mind, we will create problems for ourselves. The starting point must be realistic assumptions.”
Adedeji explained that under the Petroleum Industry Act framework, government revenue from oil now largely came from taxes and royalties rather than gross crude sales, stating that high production costs significantly affect net revenue to the federation.
He disclosed that projections indicated about 47 per cent of total oil company output translated into government revenue under current arrangements, urging lawmakers to scrutinise cost structures and enforce fiscal discipline.
The senate also revisited concerns over poor capital releases in previous budgets, particularly the 2024 and 2025 appropriations, which lawmakers said recorded minimal implementation.
Responding, Minister of State for Finance, Dr. Doris NkirukaUzoka-Anite, assured the committee that outstanding capital components of the 2024 and 2025 budgets would be fully implemented before March 31, 2026.
Uzoka-Anite disclosed that payments for 2024 capital projects were commencing immediately, adding that Ministries, Departments and Agencies (MDAs) have been directed to upload their cash plans to facilitate disbursement for 2025 projects.
“The financial management system is back online. We are ready to start, but MDAs must complete their documentation requirements,” she said.
The engagement later moved into a closed-door session lasting nearly two hours, attended by Minister of Budget and Economic Planning, Senator Atiku Bagudu, and Accountant-General of the Federation, Shamsedeen Babatunde Ogunjimi.
By the close of deliberations, the senate signalled that unless the executive revised its assumptions and provided firmer revenue guarantees, the National Assembly might be compelled to trim the N58.472 trillion proposal in the interest of fiscal realism and sustainable economic management.
Meanwhile, Chairman, National Assembly Joint Committee on Culture, Art and Creative Economy, Senator Mohammed Onawo, said the legislature was prepared to engage Tinubu through the leadership of the National Assembly on the need to provide a substantial seed capital that would enable the ministry operate independently and become self-sustaining.
Onawo challenged the ministry to determine the level of funding required to function without recurring dependence on federal allocations.
He said, “If the federal government decides to take you off the national budget, how much take-off grant would you need to become independent?
“You cannot start with nothing. Whatever we agree here, we will discuss with the senate leadership and Mr President.”
Following deliberations, the committee proposed a N1.5 trillion take-off funding package, stating that the creative and tourism sectors possess enormous untapped potential capable of transforming the country’s economic landscape.
Lawmakers maintained that with adequate capital injection, policy clarity and institutional reforms, the ministry could emerge as one of the highest revenue-generating agencies of government.
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