The Federal Government has ordered all ministries, departments and agencies to transfer 70 per cent of their 2025 capital allocations into the 2026 budget cycle, a sweeping adjustment signalling deepening fiscal strain and a shift in priority toward completing ongoing projects.
The directive is contained in the 2026 Abridged Budget Call Circular issued by the Ministry of Budget and Economic Planning and distributed to ministers, service chiefs and heads of federal agencies. The circular, obtained by The PUNCH, makes clear that MDAs will not be allowed to introduce new capital projects in the 2026 budget.
Instead, they must upload 70 per cent of their existing 2025 capital expenditure into next year’s submission—an approach the ministry says aligns government spending with immediate national needs and President Bola Tinubu’s key policy pillars: security, economic stabilisation, human capital development, infrastructure, energy, agriculture and social protection for vulnerable groups.
“MDAs are to upload 70 per cent of their 2025 Budget to continue in FY2026,” the circular stated, warning that the new framework replaces the former rollover system with a more rigid ceiling intended to curb wastage and ensure continuity.
The government also capped 2026 capital budget ceilings at exactly 70 per cent of 2025 allocations. Only 30 per cent of this year’s capital vote will be released in 2025, while the remaining 70 per cent will form the backbone of the 2026 capital programme.
The document stressed that MDAs must not exceed their 2025 overhead ceilings despite inflationary pressures, noting that revenue constraints leave little room for additional spending. It added that any overhead proposals exceeding approved limits “will be adjusted downward.”
The circular instructs MDAs to file their budget submissions via the GIFMIS Budget Preparation Subsystem, while government-owned enterprises must use the Budget Information Management and Monitoring System. All submissions are due by Tuesday, December 9, 2025.
A review of the fiscal framework attached to the circular reveals a tougher economic outlook for 2026. Total funds available for federal spending - including GOEs - stand at N54.46tn, slightly lower than the N54.99tn approved for 2025. Statutory transfers decline from N3.64tn to N3.15tn, while debt service surges from N13.94tn to N15.52tn.
Capital expenditure drops from N26.19tn in 2025 to N22.37tn in 2026, with MDA capital allocations falling sharply from N12.39tn to N8.67tn. Project-tied loans also decline from N3.36tn to N2.05tn. Meanwhile, the budget deficit widens significantly, rising to N20.12tn from N14.10tn this year.
The decision has drawn mixed reactions from economists.
Professor Sheriffdeen Tella criticised the rollover directive, arguing that the government had barely commenced implementation of the 2025 budget and lacked justification for preparing a new fiscal plan. He warned that Nigeria risked operating multiple budgets in the same year, calling the situation “a sign of fiscal disorder.”
He said, “There is no basis for any budget because what they had, they have not implemented… They should have simply rolled over the 2025 plan rather than starting a fresh one.”
Professor Adeola Adenikinju, President of the Nigerian Economic Society, also expressed concern, faulting the government for drifting away from the January–December budget cycle. He said the delayed approval of the MTEF FSP suggests Nigeria is “again running behind schedule,” undermining planning and weakening legislative oversight.
But the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, took the opposite view. He defended the rollover directive, calling it an essential step toward restoring budget credibility after years of unrealistic spending projections and persistent implementation failures.
He argued that it makes little sense to approve new capital projects when existing allocations from 2024 and 2025 remain largely unused. “What is being proposed is a way of cleaning it up so that you can normalise the situation in a way that brings some credibility to the budget process,” he said.
Budget Minister Abubakar Bagudu had earlier announced that the 2026 budget would focus heavily on ward-level development, infrastructure, security, and ramping up domestic production as part of efforts to push Nigeria toward a $1tn economy.
With falling revenues, heavy debt obligations and inflation driving costs higher, analysts warn that the government’s decision signals the start of a far more constrained fiscal environment, one that will test the administration’s ability to balance expenditure needs with shrinking fiscal space.
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