Market News

ABUJA, Dec 19 (Reuters) – Nigeria expects a budget deficit worth 4.28% of gross domestic product in 2026, President Bola Tinubu said as he announced the government’s 58.18 trillion naira ($40 billion) spending plan aimed at consolidating economic reforms and boosting growth.

The deficit will come to roughly 23.85 trillion naira, he told lawmakers on Friday.

“The 2026 budget is anchored on realism, prudence and growth orientation,” Tinubu told lawmakers in Abuja. “We will spend with purpose, manage debt with discipline, and pursue growth that is broad-based, not narrow, and sustainable, not temporary.”

The proposed budget allocates 15.52 trillion naira to debt servicing and 26.08 trillion naira for capital projects, focusing on sectors such as security, infrastructure, education and health.

The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. Oil accounts for around two-thirds of Nigeria’s export income.

The budget also projects an exchange rate of 1,400 naira to the dollar.

Tinubu said inflation had plunged to an annual rate of 14.45% in November from 24.23% in March, while foreign reserves had surged to a seven-year high of $47 billion.

“These outcomes are not accidental. They reflect difficult but deliberate policy choices,” he said.

Tinubu did not give a growth target but his budget chief on December 3 projected 4.68% growth for 2026, just above the World Bank’s 4.4% forecast.

($1 = 1,459.3900 naira)