The Centre for the Promotion of Private Enterprise (CPPE) has warned that debt sustainability projected at 46 per cent of revenue for the 2026 fiscal year remains a critical concern.
The centre raised the alarm in a statement on Sunday, December 7, signed by its Director/Chief Executive Officer, Muda Yusuf.
The Centre highlighted key issues in the 2026–2028 Medium-Term Expenditure Framework (MTEF) recently approved by the Federal Executive Council (FEC).
“The MTEF projects and allocates ₦15.91 trillion to debt service in 2026, representing 46% of projected revenue.
“This level of debt-service commitment significantly limits fiscal space for infrastructure investment, social sector spending, security and stabilisation programmes,” the CPPE said.
It stressed that Nigeria’s rising debt trajectory underscores the urgent need for a renewed focus on debt sustainability.
It also calls for stronger domestic revenue mobilisation, greater efficiency, cost-effectiveness, and accountability in public expenditure.
Pinnacle Daily reported that the FEC had, on December 3, approved the 2026–2028 MTEF.
The MTEF is a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years.
Delay presentation
The CPPE noted the delay in the presentation of the framework, citing that the Fiscal Responsibility Act mandates that the MTEF be submitted to the National Assembly at least four months before the start of the next fiscal year.
“The delayed presentation of the 2026–2028 MTEF would significantly constrain the diligence of deliberations because of the limitation of time.
“Timely submission is crucial to enabling informed legislative scrutiny, evidence-based debate, and smooth preparation of the annual budget.”
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According to the CPPE, the policy framework signals a welcome and deliberate shift toward more conservative, realistic, and credible fiscal planning.
It also responds to heightened global uncertainties, domestic fiscal pressures, recurring missed revenue targets, the pre-election dynamics in 2026, and the longstanding challenges around oil production and oil-price volatility.
It pointed out, however, that the shift—though significant—does not go far enough, particularly regarding crude oil price and output assumptions.
Dual oil output parameter
The federal government has projected a dual oil output parameter of 2.06 million barrels per day (bpd) of crude oil technical production and a 1.8 million bpd budget benchmark, fixing the oil price benchmark at $64.85 per barrel.
However, the CPPE proposed that, based on historical production trends, “an even more conservative benchmark of 1.6 mbpd to ensure fiscal resilience.”
It noted further that the $64.85 per barrel oil price benchmark appears unrealistic, as the US Energy Information Administration has projected $55/barrel, Goldman Sachs $56/barrel, and the World Bank $60/barrel.
“These projections are driven by expectations of increased global supply, moderating demand, and rising inventories.
“Aligning Nigeria’s benchmark closer to $60/barrel would strengthen the MTEF’s resilience,” the Centre urged.
Exchange rate assumptions
The CPPE noted that the benchmark exchange rate of ₦1,540/$ acknowledges the likelihood of liquidity pressures expected to arise from the 2026 election cycle and broader macroeconomic dynamics.
It called on the fiscal authority to take the appropriate measures.
“Although a weaker naira increases project costs, it simultaneously boosts naira-denominated revenues. This benchmark, therefore, provides a credible basis for fiscal planning.”
Downward revenue projection
The CPPE stated that the 2026 revenue projection of ₦34.33 trillion—a 16 per cent reduction from the ₦36.35 trillion projected for 2025—reflects a more grounded assessment of Nigeria’s revenue conditions despite ongoing tax and administrative reforms.
This downward adjustment is a welcome sign of improved fiscal prudence, it stated.
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“The 2026–2028 MTEF marks a positive step toward embedding fiscal realism, strengthening budget credibility, and 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, discipline in public expenditure, and improved implementation efficiency.
“If sustained, these reforms will help entrench macroeconomic stability, rebuild public confidence, and enhance the credibility of the budget process,” the CPPE added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
