Senate Slashes Oil Benchmark, Okays ₦17.88 Trillion Borrowing For 2026

The Senate has reduced the oil price benchmark for the 2026 fiscal year from $64.80 to $60 per barrel in the proposed ₦54.46 trillion Federal Government budget framework, while retaining all other macroeconomic and fiscal projections contained in the 2026-2028 Medium Term Expenditure Framework and Fiscal Strategy Paper.

Naija News reports that the adjustment on Tuesday, December 16, 2025, followed the recommendations of the Senate Committee on Finance, as contained in a report presented by its Chairman, Senator Sani Musa (Niger East).

Explaining the decision, Musa said the reduction was informed by prevailing global realities, particularly geopolitical tensions in Europe and the Middle East and their impact on crude oil price volatility.

According to him, the committee considered it prudent to adopt a more conservative benchmark “in recognition of the sensitivity of global crude oil prices.”

The Senate also approved the committee’s revised oil price benchmarks for subsequent years, adjusting the 2027 figure from $64.30 to $65 per barrel and the 2028 projection from $65.50 to $70 per barrel.

Despite the downward review of the 2026 oil price benchmark, the Senate retained domestic crude oil production projections of 1.84 million barrels per day for 2026, 1.88 million barrels per day for 2027 and 1.92 million barrels per day for 2028.

The upper chamber expressed confidence in ongoing sectoral reforms and sustained efforts to stabilise and boost oil output.

On macroeconomic assumptions, the Senate endorsed projected exchange rates of ₦1,512 to the dollar in 2026, ₦1,432.15 in 2027 and ₦1,383.18 in 2028.

These projections, according to the committee, align with the Central Bank of Nigeria’s (CBN) policy direction to stabilise the naira through improved coordination of fiscal and monetary policies.

Inflation is also projected to moderate steadily over the medium term, with rates of 16.5 per cent in 2026, 13 per cent in 2027 and nine per cent in 2028.

The committee anchored these estimates on the commitment of monetary authorities to rein in inflationary pressures.

The Senate further sustained real Gross Domestic Product growth projections of 4.68 per cent for 2026, 5.96 per cent for 2027 and 7.9 per cent for 2028.

It cited ongoing economic reforms and the anticipated impact of recently enacted tax reforms, expected to take firmer effect from 2026, as key drivers of growth.

A major highlight of the report was the emphasis on the effective implementation of the new Tax Acts as critical tools for economic reform, growth and development.

In this regard, the committee recommended that the Federal Government implement a National Scanning Policy under the National Single Window of the Nigeria Revenue Service, in collaboration with relevant agencies.

According to the report, the policy would “enhance revenue assurance, improve trade facilitation, reduce leakages, strengthen transparency and bolster national security.”

Budget Size, Borrowing Profile

On fiscal operations, the Senate approved the 2026 Federal Government budget framework with total expenditure projected at ₦54.46 trillion.

FGN retained revenue is estimated at ₦34.33 trillion, while new borrowingsboth domestic and foreign, are put at ₦17.88 trillion. Debt service obligations are projected at ₦15.52 trillion.

The framework also provides ₦1.376 trillion for pensions, gratuities and retirees’ benefits, with the fiscal deficit pegged at ₦20.13 trillion.

Capital expenditure, excluding transfers, was sustained at ₦20.131 trillion, alongside statutory transfers of ₦3.152 trillion and a Sinking Fund provision of ₦388.54 billion.

Total recurrent (non-debt) expenditure was approved at ₦15.265 trillion, while special intervention funds for recurrent and capital spending were fixed at ₦200 billion and ₦14 billion, respectively.

In its concluding remarks, the committee expressed appreciation to the Senate and members of the Committee on Finance for what it described as their commitment to a critical national assignment.

It expressed optimism that the approval and diligent implementation of the recommendations would serve as a catalyst for sustainable economic prosperity.