The Centre for the Promotion of Private Enterprise (CPPE) has commended the Federal Government’s shift toward more conservative fiscal planning in the newly released 2026–2028 Medium-Term Expenditure Framework (MTEF).
It, however, warned that key assumptions, particularly on crude oil benchmarks, remain overly optimistic and could undermine budget credibility if not further adjusted.
In its policy brief, the CPPE said the MTEF presented by the Minister of Budget and National Planning, Senator Abubakar Bagudu, reflects a welcome departure from historically unrealistic revenue projections that have contributed to persistent budget underperformance.
The organisation noted that more cautious revenue and expenditure assumptions represent an important step toward narrowing the gap between approved budgets and actual implementation.
However, it argued that deeper reforms are still required to bring the oil production and price benchmarks closer to Nigeria’s historical realities and global market conditions.
The think tank highlighted the introduction of dual oil production parameters as an improvement on past frameworks, with the government adopting a technical production target of 2.06 million barrels per day and a benchmark production of 1.80 million barrels per day. While describing this shift as more prudent than previous assumptions, the CPPE recommended a lower benchmark of 1.6 million barrels per day, citing chronic underproduction, oil theft, and operational disruptions that have repeatedly dragged output below government targets.
It also faulted the 2026 oil price benchmark of $64.85 per barrel as still relatively high when compared with global forecasts from the U.S. Energy Information Administration, Goldman Sachs and the World Bank, which range between $55 and $60 per barrel.
The organisation acknowledged the adoption of a benchmark exchange rate of ₦1,540 to the dollar as realistic given likely liquidity pressures in the run-up to the 2026 elections and broader macroeconomic uncertainties.
According to CPPE, the assumption allows for more credible planning around foreign exchange, linked obligations despite the inflationary implications of a weaker currency.
While describing the projected 4.68 percent GDP growth for 2026 as optimistic but not materially distortive, the CPPE welcomed the downward revision of revenue expectations to ₦34.33tn, about 16 percent lower than the projection for 2025.
The group said the adjustment signals a more grounded view of Nigeria’s revenue prospects, despite ongoing reforms in tax and revenue administration.
Debt sustainability, however, remains a major concern. The MTEF allocates ₦15.91tn to debt servicing in 2026, representing 46 percent of expected revenues.
The CPPE warned that such a high debt-service burden will continue to constrain funding for infrastructure, social sectors, and security unless the government strengthens domestic revenue mobilisation and improves efficiency in public expenditure.
The organisation also expressed concern over the delayed submission of the MTEF, noting that the Fiscal Responsibility Act requires the document to be presented to the National Assembly at least four months before the start of the fiscal year.
Late presentation, it said, limits the quality of legislative scrutiny and disrupts the timely preparation of the annual budget.
CPPE called for strict adherence to statutory timelines to improve fiscal governance.
Emphasising the critical role of the National Assembly, the policy group urged lawmakers to resist pressure to inflate expenditure projections or introduce unrealistic macroeconomic assumptions during the approval process.
It stressed that budget credibility depends not only on executive proposals but also on the legislature’s commitment to evidence-based decision-making.
The CPPE concluded that while the 2026–2028 MTEF marks meaningful progress in strengthening fiscal realism and budget credibility, sustained commitment to transparent planning, realistic assumptions and disciplined expenditure is essential to achieving macroeconomic stability and restoring public confidence in Nigeria’s budgetary process.
The statement was signed by Director and Chief Executive Officer of the CPPE, Dr. Muda Yusuf, and issued on December 7, 2025.
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