The Nigerian Senate has signaled its intention to cut the proposed budget of **N58.472 trillion** for the 2026 fiscal year, citing concerns over unrealistic revenue projections, poor oil performance benchmarks, and ongoing issues with capital budget implementation. This warning emerged during a tense interactive session on Thursday between the Senate Committee on Appropriations and the federal government’s economic team, where lawmakers scrutinized the assumptions underpinning the ambitious budget proposal.
In a related development, the National Assembly has proposed a **N1.5 trillion** take-off grant for the **Federal Ministry of Art, Culture, Tourism and the Creative Economy (FMACTCE)**. This initiative aims to reposition the sector as a significant driver of economic diversification and reduce Nigeria’s reliance on oil revenue. Minister **Hannatu Musa Musawa** emphasized that the sector could contribute **$100 billion** to Nigeria’s Gross Domestic Product (GDP) and create over **2.5 million** jobs by **2030**.
During the session, **Senator Solomon Adeola**, Chairman of the Senate Committee on Appropriations, raised concerns regarding the credibility of the budget’s key assumptions. He highlighted a persistent gap between projected and realized oil revenues, referencing performance levels of **18 percent** and **36.5 percent** in previous fiscal years, well below expectations. “How do we explain this level of underperformance?” Adeola questioned. He further warned that Nigeria’s debt stock, currently around **N152 trillion**, cannot support unrealistic budget projections.
**Wale Edun**, the Minister of Finance and Coordinating Minister of the Economy, defended the proposed oil production benchmark of **1.84 million barrels per day**, describing it as a “stretch target” designed to drive performance. He stated, “It is a stretch target so that authorities do not settle for lower output.” Edun also mentioned that security spending has been prioritized in the 2026 budget, with emergency funding released for military procurements.
Edun noted that Nigeria’s debt challenges are more about the high cost of borrowing in international markets than the debt-to-GDP ratio. He reported a **growth rate of about four percent**, easing inflationary pressures, improved foreign reserves, and greater exchange rate stability. Additionally, renewed investor confidence was highlighted, including a **$20 billion** commitment from Shell.
**Dr. Zacch Adedeji**, Chairman of the Nigeria Revenue Service (NRS), echoed lawmakers’ concerns about unrealistic revenue assumptions undermining budget performance. He stated, “Budget efficiency is not in the size of the budget; it is in what you can implement.” Adedeji explained that under the **Petroleum Industry Act**, government revenue from oil is primarily derived from taxes and royalties, with high production costs impacting net revenue.
Lawmakers also revisited concerns regarding poor capital releases in previous budgets, particularly for **2024** and **2025**, which recorded minimal implementation. In response, **Dr. Doris Nkiruka Uzoka-Anite**, Minister of State for Finance, assured the committee that outstanding capital components for these budgets would be fully implemented before **March 31, 2026**. She announced that payments for 2024 capital projects would commence immediately.
The session concluded with a closed-door discussion that lasted nearly two hours, involving key officials, including **Senator Atiku Bagudu**, Minister of Budget and Economic Planning. By the end of the deliberations, the Senate indicated that unless the executive revised its assumptions and provided firmer revenue guarantees, it might be compelled to trim the **N58.472 trillion** proposal.
Separately, **Senator Mohammed Onawo**, Chairman of the National Assembly Joint Committee on Culture, Art, and Creative Economy, stated the legislature is prepared to engage with President **Bola Tinubu** regarding the need for substantial seed capital to enable the ministry to operate independently. Onawo challenged the ministry to identify the funding level required to function without ongoing federal allocations, stating, “You cannot start with nothing.”
The committee’s proposal of **N1.5 trillion** in funding reflects the potential of the creative and tourism sectors to transform Nigeria’s economic landscape. Lawmakers remain optimistic that with sufficient capital injection and policy reforms, the ministry can emerge as one of the highest revenue-generating agencies of government.
