The Federal Government has directed all ministries, departments, and agencies (MDAs) to transfer 70% of their 2025 capital budget into the 2026 financial year, as part of efforts to prioritise ongoing projects and manage spending amid weak revenue performance.
The directive is contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning and circulated to ministers, service chiefs, and heads of agencies.
According to the document, seen by The PUNCH, the 2026 budget will not allow new capital projects. Instead, MDAs must continue with already approved 2025 allocations, uploading 70% of their capital provision for use in 2026, in line with national priorities such as security, economic stability, education, health, agriculture, infrastructure, power, and social safety nets.
The circular explained that the rollover reflects the administration’s focus on the country’s immediate development needs and sets capital ceilings for 2026 at 70% of 2025 project allocations. Only 30% of the current year’s capital budget will be released in 2025, with the remaining 70% forming the base of the 2026 capital budget—replacing the old rollover method and ensuring continuity on ongoing projects.
MDAs were also cautioned not to exceed their 2025 overhead ceilings when preparing 2026 proposals. While inflation has driven up costs, the circular noted that revenue constraints limit the government’s ability to significantly increase overhead spending.
The circular emphasized that all budget submissions must align with the 2026–2028 Medium Term Expenditure Framework (MTEF), the Renewed Hope Agenda, the National Development Plan, and other key government programmes. It also noted that expenditure would undergo strict scrutiny to ensure value for money, and that the government remains committed to improving budget implementation and monitoring.
MDAs must submit their budgets through the GIFMIS Budget Preparation Subsystem, while government-owned enterprises will use the Budget Information Management and Monitoring System, with a submission deadline of December 9, 2025.
On personnel costs, the Budget Office has already prepared allocations using data from the Integrated Personnel and Payroll Information System (IPPIS) and earlier submissions.
Financial projections attached to the circular show tighter revenues and higher debt servicing. The total amount available for the 2026 Federal Government budget, including GOEs, is N54.46tn, slightly below N54.99tn in 2025.
Statutory transfers are projected at N3.15tn, while recurrent non-debt spending is estimated at N15.26tn.
Debt servicing would rise from N13.94tn in 2025 to N15.52tn in 2026.
Aggregate capital expenditure drops from N26.19tn in 2025 to N22.37tn in 2026, with MDA capital allocation falling from N12.39tn to N8.67tn. Project-tied loans also decline from N3.36tn to N2.05tn, while the budget deficit climbs from N14.10tn to N20.12tn.
Mixed reactions from economists
Economists interviewed by The PUNCH offered contrasting views on the rollover directive.
Development economist Dr. Aliyu Ilias criticised the plan, arguing that it signals weak fiscal discipline and deprives Nigerians of the benefits of projects that should already have been delivered. He warned that the arrangement could create room for corruption and blamed both the government and the National Assembly for failing in their oversight responsibilities. He described the situation as “announced suffering,” saying citizens are heavily dependent on capital projects that have now been delayed.
In contrast, Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, supported the decision, saying it restores credibility to the budget process. He argued that approving new capital spending while old allocations remained unimplemented was unrealistic, and maintained that the rollover helps “clean up an anomaly” caused by years of unrealistic revenue and expenditure assumptions.
Meanwhile, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the 2026 budget cycle is designed to support the administration’s drive toward building a $1tn economy, with a renewed focus on community-level development, infrastructure, domestic production, and security.
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