Lawmakers Debate Deficit Financing Amid Calls for Fiscal Prudence

The Nigerian Senate approved the 2026 Medium-Term Expenditure Framework (MTEF) on July 13, 2025, setting the stage for a N15.3 trillion national budget. The framework, presented by the executive, allocates 25% to capital projects, prioritizing infrastructure, healthcare, and education. Senate President Godswill Akpabio described the approval as a commitment to sustainable development, highlighting plans for new roads and power upgrades. The MTEF projects a N3.1 trillion deficit, to be financed through borrowing, sparking concerns among opposition senators from the People’s Democratic Party (PDP).

They argued that Nigeria’s debt, estimated at N121 trillion, risks becoming unsustainable without rigorous oversight. The approval followed intense debates, with South-South senators pushing for more funding for Niger Delta projects, citing environmental challenges. Economic analysts have mixed views: some see the focus on capital expenditure as a growth driver, while others warn that recurrent spending, at 60% of the budget, could strain resources. Civil society groups, including the Centre for Social Justice, called for transparency in loan utilization, citing past mismanagement.

The MTEF’s passage is a critical step toward the 2026 budget presentation in October, with implications for Nigeria’s economic stability. Citizens, particularly in urban centers like Lagos and Abuja, are watching closely, as the framework will influence job creation and inflation control. The Senate’s decision has sparked nationwide discussions, with stakeholders urging alignment with global economic trends, especially given Nigeria’s reliance on oil revenue. The outcome of these debates will shape public trust in the government’s fiscal strategy.