The Senate on Thursday subjected the Federal Government’s economic team to about five hours of questioning over rising debt obligations, revenue projections and what lawmakers described as unrealistic budget assumptions.
The scrutiny followed deliberations on the proposed N58.472tn 2026 Appropriation Bill at an interactive session with the Senate Committee on Appropriations, chaired by Senator Solomon Olamilekan Adeola (Ogun West).
Lawmakers queried oil production benchmarks, projected revenue, debt servicing costs and the implementation record of previous budgets, particularly capital releases to Ministries, Departments and Agencies.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told the panel that security spending had been prioritised under the proposed budget.
Edun said, “We all agree that security is to be prioritised. I can assure you that emergency funding has been given. Critical foreign payments for security equipment have been made at least twice this year that I know of, including as recently as yesterday.”
Edun described the projected oil production benchmark of 1.84 million barrels per day as a “stretch target,” explaining that it was intended to drive improved output.
“It is a stretch target so that the authorities do not settle for lower output. But as long as we do not spend what we do not have, we are within safe limits,” he said.
Responding to concerns over Nigeria’s debt profile, estimated at about N152tn, the minister said the challenge was the high cost of borrowing in international markets rather than the debt-to-GDP ratio.
“The problem is the pricing. Developing countries are forced to pay high interest rates in international markets. That is where the difficulty lies,” he said.
He noted that Nigeria is chairing the technical group of the G24, where issues of debt sustainability and rising interest rates are being discussed.
“When this administration came in 2023, we were paying heavily to stabilise the system. You cannot undermine interest rate mechanisms without consequences. If you do not maintain credibility, the exchange rate will move,” he added.
The Chairman of the Nigeria Revenue Service, Zacch Adedeji, warned against inflated revenue projections, saying budget efficiency depends on realistic assumptions.
“Budget efficiency is not in the quantum of the budget; it is in what you can carry out,” he said.
He explained that under the Petroleum Industry Act, government earnings from oil production are derived mainly from taxes and royalties, as the Nigerian National Petroleum Company operates as a limited liability company.
“The only connection between the government and whatever is produced is the taxes and royalties paid. If production costs are high, the net revenue to the government is affected,” he stated.
In his remarks, Adeola said the executive must present credible projections, noting discrepancies between projected and realised oil revenues in previous fiscal years.
The senator said, “This document before us originated from the executive. The projections and challenges came from the executive arm, not the legislature. The gap between projected and realised oil revenue is wide.
“For example, how do we explain 18 per cent performance in one year and projections of 36.5 per cent the next year when actual performance is still below expectations?
“So the question is: Do we reduce the N58.472tn 2026 budget, or do we proceed and make adjustments? Debt financing is already high. If certain assets were disposed of and used to reduce debt, two things would happen: the overall debt stock would reduce, and future borrowing costs could also decline.”
Lawmakers also raised concerns over the funding of capital components in previous budgets.
The Minister of State for Finance, Doris Uzoka-Anite, assured the committee that outstanding capital payments under the 2024 and 2025 budgets would be processed before March 31, 2026.
“Regarding the 2025 budget, funding processes are beginning. Payments for outstanding 2024 capital projects start today. The financial management system is back online.
“For 2025, MDAs have been asked to upload their cash plans by Monday, after which payments will commence. We are ready to start, but the MDAs must complete their documentation requirements,” she said.
The session later went into a closed-door meeting before lawmakers adjourned further consideration of the bill.
Also in attendance were the Minister of Budget and Economic Planning, Senator Atiku Bagudu, and the Accountant-General of the Federation, Shamsedeen Babatunde Ogunjimi.
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