FG Moves to End Overlapping Budgets and Unrealistic Projections

The Federal Government has pledged to end the practice of running overlapping national budgets and relying on unrealistic revenue projections, as it moves to strengthen fiscal discipline and improve public spending.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday in Abuja during the launch of the World Bank’s Nigeria Development Update.

Oyedele said the government was working with the Budget Office and the Ministry of Budget and Economic Planning to streamline budget implementation and ensure future fiscal plans are based on actual revenue and expenditure performance rather than optimistic estimates. citeturn453302search0

He acknowledged that Nigeria’s budget process had been affected by repeated extensions of previous budgets, making it difficult to maintain a predictable spending cycle.

The minister said the government had cleared outstanding obligations under the 2024 budget and was working with the National Assembly to address the 2025 and 2026 budget cycles.

He added that any outstanding portion of the 2026 budget would be transferred into the 2027 fiscal year rather than allowing multiple budgets to operate concurrently.

Government adopts performance-based budgeting

Oyedele said the government would move away from incremental budgeting, where previous budget estimates form the basis for new proposals, towards a system built around actual outcomes.

Under the proposed approach, ministries, departments and agencies would be expected to justify deviations of more than 10 per cent from the previous year’s actual performance.

He stressed that government projections must be realistic and supported by verifiable data, rather than assumptions about expected revenue.

The proposed changes are intended to improve budget credibility, strengthen accountability and ensure public funds are allocated according to achievable targets.

President Bola Tinubu had previously pledged to end overlapping budgets and establish a more disciplined fiscal cycle. However, the extension of the 2025 capital budget into December 2026 has highlighted the challenges of implementing that commitment. citeturn453302search1turn453302search2

FG prioritises growth over higher taxes

The finance minister also reiterated the administration’s position that increased government revenue should come from economic growth and a broader tax base rather than introducing additional levies or raising existing tax rates.

According to Oyedele, the government wants more individuals and businesses to become taxpayers as employment expands and companies grow.

He said revenue would be directed towards human development and infrastructure, including roads, electricity and logistics, to reduce operating costs for businesses and improve living standards.

Oyedele acknowledged that Nigerians continue to face pressure from high food and transportation costs but argued that economic stability should provide the foundation for stronger growth and improved welfare.

He also expressed optimism that coordination between fiscal authorities and the Central Bank of Nigeria under an inflation-targeting framework could help bring inflation down over time. citeturn453302search0

World Bank projects 4.4% economic growth

The World Bank’s Nigeria Development Update projects average economic growth of 4.4 per cent between 2026 and 2028, while inflation is expected to ease to around 12 per cent by 2028.

The bank said maintaining macroeconomic stability and strengthening fiscal management would be important for sustaining growth and reducing poverty.

It warned, however, that global economic volatility, insecurity, election-related spending and prolonged conflict in the Middle East could threaten the outlook.

The report also identified improved agricultural productivity, better access to electricity and public services, job creation and more effective social protection as key measures for accelerating poverty reduction. citeturn453302search0

Oyedele said the government expected the changes to become more visible in the 2027 budget, promising a more realistic approach to revenue forecasting and public expenditure.