The proposal, presented to a joint sitting of lawmakers on Friday, sets capital spending at ₦26.08 trillion and non-debt recurrent expenditure at ₦15.25 trillion. 

Expected revenue is put at ₦34.33 trillion, leaving a deficit of ₦23.85 trillion, or 4.28% of GDP, well above the 3% limit in Nigeria’s Fiscal Responsibility Act.

At the core of the budget is a heavy debt burden. Tinubu plans to spend ₦15.52 trillion servicing existing loans, about 27% of total expenditure. 

That single line item is larger than the combined allocations to health and education, a reality that has already led to concerns among economists about how much fiscal space is left to drive growth.

Oil is the budget’s main pillar. The government pegged the crude benchmark at $64.85 per barrel, production at 1.84 million barrels per day, and the exchange rate at ₦1,400 to the dollar. 

Since the presentation, however, the Senate has adjusted the oil price assumption downward to $60 per barrel, noting global price swings and fears of oversupply. 

This looks like an early signal of the risks around revenue projections, especially as Nigeria keeps missing output targets due to theft and weak investment.

On spending priorities, defence and security take the largest share with ₦5.41 trillion, showing the scale of insecurity across the country. Infrastructure follows with ₦3.56 trillion, while education and health receive ₦3.52 trillion and ₦2.48 trillion respectively. 

Though higher than last year’s figures, education spending still falls short of global benchmarks that recommend 15 to 20% of total budgets.

Tinubu told lawmakers that the document goes beyond bookkeeping. “They are a statement of national priorities,” he said. “We remain firmly committed to fiscal sustainability, debt transparency, and value-for-money spending.”

Security featured prominently in his remarks, against the backdrop of kidnappings and violent attacks in several regions. “Security remains the foundation of development,” the president said, outlining plans that include modernising the armed forces, intelligence-led policing, tighter border control and technology-driven surveillance. 

He added: “We will invest in security with clear accountability for outcomes, because security spending must deliver security results.”

The president also returned to the economic reforms that impacted his first months in office, fuel subsidy removal and foreign exchange liberalisation, policies that pushed inflation higher. 

More than two years on, Tinubu argued that the worst is over. “I acknowledge these difficulties plainly, and I assure Nigerians that their sacrifices are not in vain,” he said. “The path of reform is seldom smooth, but it is the surest route to lasting stability and shared prosperity.”

Agriculture and food security are another focus of the 2026 budget, Tinubu described them as strategic areas capable of pulling in private investment and easing pressure on households.

“Food security is national security,” he said. “The 2026 Budget prioritises input financing and mechanisation; irrigation and climate-resilient agriculture; storage and processing; and agro-value chains.”

Analysts see strengths and cracks in equal measure. Higher capital spending and bigger allocations to security, schools and hospitals point to good intent. 

But the scale of borrowing, growing debt expenses and optimistic oil assumptions lead to questions about execution. 

But behind the noise lies a silent crisis, one that the Nigeria Extractive Industries Transparency Initiative (NEITI) says is draining the lifeblood from state development.

NEITI’s latest Policy Brief, “Beyond Federal Allocations: The Cost of Borrowings and Debt Servicing at State Level in Nigeria”, reads like both a warning siren and a call to action.

Its findings are stark: Kaduna, Ogun, Bauchi, and Cross River are diverting between one-tenth and nearly one-third of their monthly Federation Account Allocation Committee (FAAC) inflows to service debts.

For Kaduna, the picture is particularly sobering. In 2024 alone, 32.06% of its gross allocation, a hefty ₦51.2 billion out of ₦159.73 billion, never reached its people. Instead, it went straight to creditors.

Ogun followed with 27%, Bauchi 26%, and Cross River 24%.

In these states, the roads that could have been built, hospitals that could have been equipped, and schools that could have been staffed remain stalled, sacrificed to past borrowing.

“Debt, when managed efficiently, can be a tool for financing development at the grassroots,” said Dr. Ogbonnaya Orji, NEITI’s executive secretary. “But when servicing obligations consume up to a third of monthly revenues, it becomes a threat to the future of public service delivery and economic stability.”

The agency’s research, grounded in its statutory mandate under the NEITI Act 2007 and aligned with global EITI Standards, lays bare the hidden costs of poor fiscal discipline.

It shows how heavy deductions at source shrink the “fiscal space” available for grassroots investment, a phenomenon NEITI describes as a “silent fiscal emergency.”

The contrast between high-debt and low-debt states is telling. While Kaduna battles with a third of its funds gone before arrival, states like Borno (2.63%), Jigawa (2.74%), and Anambra (4.54%) retain over 95% of their allocations for direct development, thanks to prudent borrowing and tighter fiscal controls.

Beyond the numbers, NEITI’s brief warns of contractual landmines, debts linked to opaque public-private partnerships, such as ₦6 billion in Ogun and ₦7.73 billion in Ondo, which could lock states into long-term deductions with little public scrutiny.

In contrast, 18 states, including Abia, Adamawa, and Akwa Ibom, report zero such deductions, demonstrating that caution, or strategic timing, can avert future fiscal traps.

The report also shines a light on inequalities in Nigeria’s revenue-sharing formula. In 2024, Delta State received ₦581.27 billion, more than five times Nasarawa’s ₦108.32 billion.

For smaller-allocation states already saddled with high debt servicing, this imbalance threatens to widen the gap in infrastructure, jobs, and public welfare.

To avert a deeper fiscal crisis, NEITI recommends bold measures:

• Establish Debt Management Offices in all states.
• Enforce real-time debt reporting and quarterly public disclosures.
• Tie federal bailouts to improvements in internally generated revenue and transparency.
• Cap contractual deductions and publish full borrowing terms.
• Revise the revenue allocation formula to correct vertical and horizontal imbalances.

“This is not a name-and-shame exercise,” Dr. Orji insisted. “It is a mirror to reflect fiscal realities, and a map to guide states toward resilience, transparency, and equitable growth.”

In the end, NEITI’s message is clear: Nigeria’s states cannot afford to let debt dictate their destiny. The choice is stark, embrace fiscal discipline now or face a future where the bulk of public funds serve creditors instead of citizens.

The full Policy Brief has been shared with the Presidency, National Assembly, state finance commissioners, and the Governors’ Forum,  and is now in the public domain.

Whether it sparks reforms or fades into another unread policy file will determine if this silent crisis becomes an economic landslide.

In a statement signed by Moses Igbrude, ISAN national coordinator, the group strongly condemned the National Assembly’s decision to pass legislation requiring the transfer of all unclaimed dividends from the company registrar to accounts managed by the Securities and Exchange Commission (SEC), opened by the Debt Management Office in the Central Bank of Nigeria (CBN).

ISAN noted that this move is a violation of ownership rights and a betrayal of investor trust.

It stated:

“Unclaimed dividends are not government revenue. They remain the legal property of individual investors and their heirs, regardless of the time elapsed. The attempt to centralise and manage these funds under SEC control is a form of indirect expropriation.”

It noted that the Nigerian investment landscape must be built on fairness and protection of properties to ensure inclusive growth, rather than impulsive dominance. As it called for reform of the progress of claiming dividends, utilising technology and public education rather than confiscation.

ISAN also highlighted that there was a lack of consultation from relevant stakeholders such as shareholders, registrars, and major players in the capital market before the bill was passed, citing it as a disregard for public governance and due process.

Adding that there is no clear-cut communication on how the SEC intends to manage the funds, what returns will be offered to rightful owners, and how and when claims will be honoured.

The two-day event, which held at the NAF Conference Centre in Abuja, themed “Consolidating Strategies for Strengthening Legislative Compliance by MDAs,” featured leading industry experts from EFCC, NBA, Ministry of Finance and key players in Nigeria’s financial sector, including fintech firms, championed the deployment of digital tools as essential for improving transparency and enforcing legislative resolutions.

In his opening remarks, the Senate President, represented by Senator Osita Izunaso emphasized that compliance is “fundamental to democratic governance, adding that it was not optional,” underscoring the Senate’s renewed commitment to robust enforcement and institutional reform. Furthermore, he cited the constitutional provisions that granted legislative powers for law-making generally and to make laws for “peace, order and good government”.

The workshop also highlighted, with a wide array of statistics, the high cost of non-compliance; root causes of non-compliance while attempting to proffer solutions.

Amidst calls for systemic reforms, Okechukwu Eke, general counsel at Moniepoint Inc., delivered a keynote presentation focused on the responsibilities of fintechs in consumer protection and financial literacy.

Eke highlighted Moniepoint’s commitment to building a compliance culture that goes beyond mere formalities to drive genuine impact.

“At Moniepoint, we believe innovation in financial services must go hand-in-hand with strong consumer protection and legal responsibility,” Eke stated.

He stressed the unique position of fintechs, which often serve vulnerable populations with low financial literacy, making robust consumer protection paramount.

“Misuse or misunderstanding of products can cause significant financial harm,” Eke noted, adding that “legal compliance builds essential trust in digital financial services.”

The presentation outlined key legal responsibilities for fintechs, including transparency, data privacy, fair marketing, effective grievance handling, and responsible lending.

Other contributions advocated for leveraging technology to embed compliance more effectively. Suggestions arising from the workshop, supported by Moniepoint’s perspective, included empowering legislative oversight committees with real-time monitoring dashboards linked to MDAs and implementing Digital Compliance Tracking Systems.

These tools, it was argued, would allow for continuous monitoring and reporting, moving away from periodic checks towards a more dynamic and effective compliance regime.

The push for digital solutions aligns with Moniepoint’s drive to ensure that the rapid innovation characteristic of the fintech sector is matched by equally advanced methods for ensuring regulatory adherence and protecting consumers.

The call for enhanced digital oversight complements other recommendations from the workshop, such as regular reviews of legal frameworks to match innovation and strengthened collaboration between regulators like the CBN, FCCPC, NDPC, EFCC, and the National Assembly.

The workshop concluded with a reinforced commitment from legislative leaders, including Committee Chairman, Senator Garba M. Maidoki and Vice-Chairman, Senator Ede Dafinone, to pursue collaborative and innovative solutions for Nigeria’s compliance challenges.

They both averred that leveraging technology and cross-sector collaboration is vital for closing compliance gaps, enhancing oversight, and ensuring that resolutions passed by the National Assembly are fully implemented for the benefit of all Nigerians.