CPPE urges NASS, Govt to adopt realistic MTEF budget
The Centre for the Promotion of Private Enterprise (CPPE) has advised the Federal Government to adopt a realistic budget by using a more conservative crude oil production benchmark of 1.6 million barrels per day for the 2026–2028 Medium-Term Expenditure Framework, (MTEF) which will strengthen fiscal resilience and ensure timely budget presentation.
Director/Chief Executive Officer of CPPE, Dr Muda Yusuf made the call in a policy brief on appraising the MTEF recently presented by the Minister of Budget and National Planning, Sen. Abubakar Bagudu.
Yusuf said that by adopting more cautious revenue and expenditure assumptions, the new MTEF strengthens the foundation for improved budget credibility and more sustainable fiscal outcomes.
However, he stated that the shift—though significant—does not go far enough, particularly regarding crude oil price and output assumptions.
He decried the persistent revenue underperformance—rooted in overly optimistic macroeconomic assumptions, which remains one of the most significant weaknesses of Nigeria’s budget process, adding that this has repeatedly resulted in wide gaps between appropriations and actual implementation, weakening fiscal outcomes and undermining public trust.
According to the CPPE boss, the unrealistic assumptions of the 2025 budget were particularly damaging, contributing to implementation shortfalls and widening credibility gaps.
He, however, noted that the emerging shift toward more realistic assumptions in the 2026–2028 MTEF is therefore commendable, as it represents an important step toward reducing variances between projected and realised outcomes and toward restoring the budget as a credible governance tool rather than a routine, ceremonial annual document.
He explained that one major improvement in the new MTEF is the introduction of dual oil production parameters, noting that using 1.80 mbpd as the revenue basis is significantly more prudent than the 2.06 mbpd used in the 2025 budget, especially given chronic underproduction, vandalism, theft, and operational bottlenecks.
CPPE proposes, based on historical production trends, an even more conservative benchmark of 1.6 mbpd to ensure fiscal resilience.
Yusuf acknowledged the 2026 oil price benchmark of $64.85 per barrel, down from $75 in the 2025 budget, also reflects a more cautious approach, nonetheless, even this estimate is still somewhat optimistic, given global forecasts.
The Centre cited forecasts from the US Energy Information Administration ($55), Goldman Sachs ($56), and the World Bank ($60), adding that aligning Nigeria’s benchmark to about $60 per barrel would “strengthen the MTEF’s resilience.”
He pointed out that the benchmark exchange rate of ₦1,540/$ acknowledges likely liquidity pressures arising from the 2026 election cycle and broader macroeconomic dynamics, however, he said this assumption provides a realistic basis for planning around: FX-linked capital projects; Contract price variations; Imported input costs; and Broader implementation risks.
Although a weaker naira increases project costs, he said, it simultaneously boosts naira-denominated revenues, noting that this benchmark, therefore, provides a credible basis for fiscal planning.
On growth projection and revenue outlook, the CPEE CEO, maintained that the GDP growth projection of 4.68%, though optimistic, remains largely aspirational and does not materially distort fiscal planning.
The organisation described the projected N34.33tn revenue for 2026, a 16 per cent reduction from the N36.35tn projected for 2025, as a welcome sign of fiscal prudence, going by the more grounded assessment of Nigeria’s revenue conditions despite ongoing tax and administrative reforms.
Yusuf said the GDP growth projection of 4.68 per cent remained “aspirational”, although it did not materially distort the fiscal framework.
The CPPE warned that Nigeria’s debt service burden remained a significant threat to fiscal sustainability, with the MTEF projecting N15.91tn for debt servicing in 2026, amounting to 46 per cent of expected revenue.
The organisation further warned that this level of debt-service commitment significantly limits fiscal space for: Infrastructure investment; Social sector spending as well as Security and stabilisation programmes.
Yusuf bemoaned the delayed presentation of the MTEF, stressing that the Fiscal Responsibility Act mandates that the MTEF be submitted to the National Assembly (NASS) at least four months before the start of the next fiscal year.
He added that the delayed presentation of the 2026–2028 MTEF would significantly constrain the diligence of deliberations because of the limitation of time for informed legislative scrutiny, evidence-based debate, and smooth preparation of the annual budget.
The CPPE advocated for strict adherence to the provisions of the Act and for the National Assembly to play a decisive role in safeguarding fiscal realism.
Yusuf advised the National legislators to resist pressures to: Inflate expenditure estimates; Expand the budget without credible revenue backing as well as reintroduce unrealistic macroeconomic assumptions.
The organization also warned that budget credibility depended not only on executive proposals but also on the legislature’s commitment to evidence-based fiscal decision-making.
Yusuf concluded that the 2026–2028 MTEF represented progress toward embedding fiscal realism, but called for stronger adherence to aligning national expenditure with Nigeria’s real implementation capacity.
“For Nigeria’s budget process to evolve into a truly effective tool of governance, rather than an annual procedural formality, both the Executive and the Legislature must uphold the principles of realistic and evidence-based assumptions, transparent and credible fiscal planning, and discipline in public expenditure,” he explained.
The CPPE opined that sustained reforms would help strengthen macroeconomic stability, rebuild public confidence, and enhance the credibility of Nigeria’s budget process.