Nigeria will need to borrow heavily to cover a projected N25.27 trillion deficit in the 2026 budget, the Senate has warned, as rising debt levels and weak revenue generation continue to threaten fiscal stability.
Senate Committee on Appropriations Chairman, Senator Solomon Adeola, made the disclosure during a public hearing on the 2026 Appropriation Bill at the National Assembly yesterday.
The proposed budget sets total expenditure at N58.47 trillion against expected revenue of N33.19 trillion, creating the large gap.Debt servicing is expected to take N15.90 trillion of the total spending.
“Nigeria cannot avoid borrowing given unpredictable revenue and huge development needs,” Adeola said.
“The focus must be on responsible deficit management and ensuring borrowed funds deliver real value.”
The senator declared that the National Assembly would no longer permit budget extensions beyond December 31 of any fiscal year, pointing to chronic poor implementation, abandoned projects, and weak performance by Ministries, Departments and Agencies (MDAs).
Adeola said borrowing would be managed carefully to prevent crowding out private-sector credit, with preference for concessional external loans, public-private partnerships, asset optimisation, privatisation, and Eurobond issuances when needed.
He also announced tougher oversight of service-wide votes, stating no agency would access such funds without strict accountability.
Every expenditure item would face rigorous scrutiny to enforce transparency and fiscal discipline.
The warning follows fresh evidence of severe funding shortfalls in critical sectors. During a 2026 budget defence before the House of Representatives Committee on Healthcare Services, Minister of Health Prof. Mohammed Ali Pate revealed that the Federal Ministry of Health received just N36 million out of N218 billion allocated for its 2025 capital projects.
Pate blamed the shortfall on the Office of the Accountant-General’s bottom-up cash planning system, delays in counterpart fund releases, and barriers to accessing donor-supported financing issues he said were largely outside the ministry’s control.
He reaffirmed the ministry’s focus on Universal Health Coverage (UHC) and primary healthcare strengthening, guided by the National Health Act, the 2016 National Health Policy, and the Medium-Term National Development Plan.
House Committee Chairman Amos Magaji directed the minister to provide detailed records of donor funds received and utilised.
The developments highlight deepening concerns over Nigeria’s fiscal path, with the Senate vowing stricter timelines, enhanced transparency, and urgent reforms especially in the power sector to improve budget execution and reduce reliance on unsustainable borrowing in the coming year.
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