Amanze Chinonye
The Senate has firmly backed the Federal Government’s decision to finance the N25.91 trillion deficit in the proposed N58.47 trillion 2026 Appropriation Bill through borrowing, arguing that the country has little choice given weak revenue inflows and mounting development demands.
Lawmakers made the case during a public hearing on the budget proposal at the National Assembly, where they maintained that deficit financing, if properly managed, remains a legitimate tool for funding national priorities.
Chairman of the Senate Committee on Appropriations, Senator Solomon Adeola, said Nigeria’s fiscal reality makes borrowing inevitable, noting that projected government revenue of N33.19 trillion falls far short of the expenditure estimate for 2026.
Join our WhatsApp ChannelAccording to Adeola, the challenge before the country is not the size of the deficit but the quality of spending and the discipline applied to borrowed funds.
“Nigeria’s development needs are huge, while revenue remains unstable. Borrowing is therefore unavoidable. What is critical is ensuring that loans are properly structured and deployed for growth-enhancing projects,” he said.
He disclosed that the projected deficit stands at about N25.27 trillion, while debt servicing is expected to consume approximately N15.90 trillion in the coming fiscal year, a situation he said underscores the urgency of expanding revenue sources and tightening fiscal controls.
Adeola explained that the Federal Government was deliberately limiting domestic borrowing to avoid squeezing credit to the private sector, opting instead for a financing mix that includes external loans, asset sales, privatisation initiatives, Public-Private Partnerships (PPPs) and infrastructure concessions.
On energy reforms, the senator said the Senate would push for the complete removal of electricity subsidies, warning that partial implementation of power sector reforms would continue to place an unsustainable burden on public finances.
“The electricity sector cannot remain half-reformed. Subsidies there are still draining resources that should be going into infrastructure and social development,” he said.
He also announced that the National Assembly would no longer approve extensions of budget implementation timelines, blaming repeated rollovers for poor fiscal outcomes and weak accountability among government agencies.
President of the Senate, Godswill Akpabio, who was represented by Deputy Senate President Barau Jibrin, described the 2026 budget as a defining test of leadership and governance.
“A budget reflects our values as a nation. Borrowing must translate into visible improvements in the daily lives of Nigerians, not just figures on paper,” Akpabio said.
Minister of State for Finance, Dr. Doris Nkiruka Uzoka-Anite, said the proposed budget was crafted to consolidate ongoing economic reforms and deploy limited resources more efficiently, even as she acknowledged the pressure Nigerians continue to face from rising living costs.
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The Accountant-General of the Federation, Shamseldeen Olujimi, also urged a shift away from headline-driven budgeting to results-based execution, saying budget success should be judged by real outcomes such as functional schools, accessible healthcare, reliable electricity and employment generation.
Meanwhile, concerns were raised over sectoral funding, as the Minister of Industry, Trade and Investment, Mrs. Jumoke Oduwole, criticised the proposed N2.72 billion capital allocation to her ministry, describing it as insufficient to deliver programmes required to drive industrial growth and attract investment.
Appearing before the joint Senate Committees on Trade and Investment and Industry, Oduwole appealed for an upward review of the allocation, warning that inadequate funding could undermine efforts to diversify the economy and achieve the administration’s target of building a $1 trillion economy.
She disclosed that Nigeria attracted about $21 billion in capital importation in the first 10 months of 2025, a significant increase from $12 billion in 2024 and less than $4 billion in 2023, attributing the improvement to targeted investment reforms and engagement with international partners.
Chairman of the Senate Committee on Trade and Investment, Senator Umar Sadiq, acknowledged the ministry’s strategic role in driving non-oil growth, while Chairman of the Senate Committee on Industry, Senator Francis Fadahunsi, urged clearer evidence of impact, particularly in job creation, exports and industrial output.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
