The Federal Government has instructed ministries, departments, and agencies (MDAs) to roll over 70% of their 2025 capital budget into the 2026 fiscal year.
The measure is part of efforts to complete existing projects and reduce new spending pressures amid tight revenues.
The order is contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning and circulated to ministers, service chiefs, heads of agencies, and other senior officials.
The document stated that annual budget estimates must follow strict rules, and officers responsible for budget preparation must comply.
The circular made clear that the 2026 budget process will not admit new capital projects. Instead, MDAs must continue with allocations already approved in the 2025 budget. It noted that the rollover must be consistent with national priorities and immediate needs.
According to the directive, “MDAs are to upload 70% of their 2025 FGN Budget to continue in FY2026. All such rollover and uploads MUST be in line with the immediate needs of the country as well as government’s development priorities that aligns with the policy direction of the new administration.”
Government priorities were listed as national security, the economy, education, health, agriculture, infrastructure, power and energy, and social safety nets, including women and youth empowerment.
Only 30% of 2025 capital budget will be implemented this year
Under the new framework, capital budget ceilings for 2026 are set at 70% of 2025 project allocations. Only 30% of the 2025 capital budget will be released within the current year. The remaining 70% forms the basis of the 2026 capital budget, replacing the previous practice of a full rollover.
The circular argued that the shift will ensure continuity and eliminate wasteful duplication. MDAs are warned not to exceed their 2025 overhead ceilings when preparing submissions for 2026. The document acknowledged inflationary pressures on overheads but said government revenues remain weak.
“MDAs are required to work within and not exceed their 2025 overhead ceilings (Executive Proposal) for the purpose of preparing their 2026 Overhead budget submissions. While we note the impact of inflation on overhead costs, we are, however, constrained by revenue challenges,” the circular stated.
Budget estimates must follow the policies in the 2026–2028 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper, described as the Federal Government’s pre-budget statement. The document referred to the administration’s priorities under the Renewed Hope Agenda, including the Renewed Hope Infrastructure Development Plan, Ward Development Plan, National Development Plan and the Accelerated Stabilisation and Actualisation Plan.
All expenditure will be scrutinised to allow only essential spending and ensure value for money. The government is committed to improving the efficiency and quality of spending and strengthening budget formulation, implementation, monitoring and evaluation.
MDAs must make submissions online through the GIFMIS Budget Preparation Subsystem. Government-owned enterprises must submit through the Budget Information Management and Monitoring System. All submissions must be completed by December 9, 2025. The circular added that budget officers are not responsible for uploading submissions on behalf of any MDA.
Lower capital spending, higher debt service and rising deficit
The financial framework attached to the circular indicates a tighter revenue outlook as debt service rises. Available resources for the Federal Government and government-owned enterprises drop slightly from N54.99 trillion in 2025 to N54.46 trillion in 2026.
Statutory transfers fall from N3.64tn in 2025 to N3.15tn in 2026. Recurrent non-debt expenditure is projected at N15.26 trillion, while debt service rises from N13.94 trillion to N15.52 trillion.
Aggregate capital spending declines from N26.19 trillion to N22.37 trillion next year. The capital budget includes supplementation, statutory transfers, special intervention programmes, MDAs capital, GOEs capital, grants, donor-funded projects and project-tied loans.
Funds available for MDAs capital expenditure drop from N12.39 trillion in 2025 to N8.67 trillion in 2026. Project-tied loans fall sharply from N3.36 trillion to N2.05 trillion.
The deficit widens from N14.10 trillion in the current fiscal year to N20.12 trillion in 2026, reflecting higher debt service and lower available capital allocations.
What you should know
Nigeria now routinely operates with overlapping budgets, a practice that intensified from around 2023 when the federal government began extending main and supplementary budgets into subsequent fiscal years.
By 2024, multiple instruments were active at the same time, including the 2023 main and supplementary budgets, the 2024 main budget and a 2024 supplementary budget, even as a new appropriation was introduced.
The Budget Office has defended the arrangement, saying delayed implementation and multi-year projects make it legal and part of ongoing reforms, though analysts argue it weakens accountability and disrupts the January–December cycle.
