9th December, 2025.
The Federal Government has directed all ministries, departments, and agencies to carry over 70 per cent of their 2025 capital allocations into the 2026 fiscal year, effectively halting the introduction of new capital projects as the administration grapples with revenue constraints and mounting debt obligations.
The directive, issued through the 2026 Abridged Budget Call Circular by the Federal Ministry of Budget and Economic Planning, was distributed to ministers, service chiefs, agency heads, and top government officials in Abuja, according to a report by The PUNCH.
The circular stipulates that MDAs must upload 70 per cent of their 2025 capital budget to continue implementation in 2026, ensuring alignment with national priorities including security, economic development, education, health, agriculture, infrastructure, power, energy, and social safety nets.
Under the new framework, only 30 per cent of the 2025 capital budget will be released within the current fiscal year, while the remaining 70 per cent forms the basis for 2026 capital expenditure. The government said this approach would ensure project continuity and eliminate wasteful duplication.
The circular also directed MDAs to remain within their 2025 overhead ceilings when preparing 2026 submissions, citing revenue challenges despite acknowledging inflationary pressures on operational costs. The government committed to achieving full overhead budget releases but warned that proposals exceeding approved ceilings would be adjusted downward.
According to the financial framework accompanying the circular, the amount available for the Federal Government budget, including government-owned enterprises, drops from N54.99 trillion in 2025 to N54.46 trillion in 2026. MDA capital expenditure falls sharply from N12.39 trillion to N8.67 trillion, while debt service increases from N13.94 trillion to N15.52 trillion. The projected deficit rises from N14.10 trillion in 2025 to N20.12 trillion in 2026.
The circular set Tuesday, December 9, 2025, as the deadline for MDAs to submit their budgets through the GIFMIS Budget Preparation Subsystem, while government-owned enterprises were required to use the Budget Information Management and Monitoring System.
Speaking at a stakeholders’ engagement with the Nigeria International Non-Governmental Organisation Forum in Abuja on Monday, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the 2026 budget would focus on ward-based development, infrastructure, security, and stronger domestic production. He explained that the Medium-Term Expenditure Framework approved by the Federal Executive Council outlines revenue projections and strategies to support the country’s $1 trillion economy target.
Economists expressed divergent views on the rollover decision. Professor Sheriffdeen Tella of Olabisi Onabanjo University questioned the basis for preparing the 2026 budget when implementation of the 2025 budget had barely commenced. He noted that the 2025 budget started late and lacked performance indicators to justify new projections.
Professor Adeola Adenikinju, National President of the Nigerian Economic Society, criticised the government for abandoning the January to December budget cycle. He argued that the late budget presentation prevents proper scrutiny by the National Assembly and creates a disorganised fiscal environment.
Dr Aliyu Ilias, Chief Executive of CSA Advisory, described the rollover as evidence of poor fiscal discipline. He questioned the oversight mechanisms for rolled-over spending and warned that the situation created opportunities for abuse. He also criticised the National Assembly for failing in its oversight responsibilities.
However, Dr Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, supported the decision, describing it as necessary to restore credibility to the budget process. He argued that continuing to approve fresh capital allocations while previous ones remained unimplemented was unrealistic and perpetuated anomalies in the system.