President Bola Tinubu's approval of the N68.32 trillion 2026 Appropriation Bill signals a strong push for economic growth through increased spending, but raises serious concerns about fiscal sustainability, according to Olayinka Odutola, Director-General of the Association of Enterprise Risk Management Professionals (AERMP). Odutola warned that the budget's expansionary stance, driven by inflation and rising debt service obligations, could worsen Nigeria's fiscal pressures given the country's limited revenue base. He stressed that without a significant improvement in revenue mobilisation—particularly non-oil revenue—the deficit would widen, requiring more borrowing and fueling a cycle of escalating debt and servicing costs. This, he said, would shrink the fiscal space available for critical development projects. Odutola also highlighted risks tied to the extension of the 2025 budget implementation to June 30, 2026, noting it could blur accountability and distort the tracking of project performance across fiscal years. While acknowledging the move as a practical effort to improve capital expenditure absorption—historically hampered by procurement delays and funding gaps—he cautioned that overlapping budgets complicate financial oversight. He urged authorities to prioritise revenue resilience, expenditure discipline, and efficient project governance to ensure value for money. Recent tax reforms were acknowledged as positive steps, but Odutola stressed the need for stronger tax administration and broader revenue diversification. He emphasized that the true measure of the budget's success lies not in its size, but in how sustainably it is funded and how effectively it is implemented. The government's ability to manage these risks will determine the outcome of its fiscal strategy.
The approval of a N68.32 trillion budget amid weak revenue collection reveals a reliance on borrowing to simulate growth rather than generate it. Extending the 2025 budget to mid-2026 may ease spending bottlenecks but undermines fiscal transparency and performance tracking. If non-oil revenue fails to rise as projected, debt servicing will consume an even larger share of public funds. This budget bets on growth through spending, but the real test is whether the government can break the cycle of borrowing to fund itself.
💡 NaijaBuzz is an AI-assisted news aggregator. This content is curated from third-party sources — NaijaBuzz is not the original publisher and is not responsible for the accuracy of source reporting. The NaijaBuzz Take is AI-assisted editorial opinion only, not established fact. All persons mentioned are presumed innocent until proven guilty by a court of competent jurisdiction. NaijaBuzz does not endorse the views expressed in source articles.
