The Federal Government of Nigeria (FG), has directed all Ministries, Departments, and Agencies (MDAs), to carry over 70 per cent of their 2025 capital allocations into the 2026 fiscal year. The directive, aimed at strengthening budget continuity and ensuring completion of ongoing projects, comes amid mounting fiscal pressures and constrained revenues.
The Directive
The instruction is contained in the 2026 Abridged Budget Call Circular, issued by the Ministry of Budget and Economic Planning and circulated to ministers, service chiefs, and heads of agencies. The circular outlines a new framework that caps all 2026 capital budget ceilings at 70 per cent of 2025 project allocations.
Key elements of the directive include:
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Only 30 per cent of the 2025 capital budget will be released in the current year, while the remaining 70 per cent forms the base of the 2026 capital spending.
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No new capital projects are allowed in next year’s budget. MDAs are expected to focus solely on completing ongoing projects.
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Rollover items must align with the administration’s priorities, including national security, economic growth, education, health, agriculture, infrastructure, power, energy, and social safety nets.
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MDAs are prohibited from exceeding their 2025 overhead ceilings in 2026 submissions, despite inflationary pressures. “We are constrained by revenue challenges,” the circular notes. “While we note the impact of inflation, proposals that exceed approved ceilings will be adjusted downward.”
The government emphasizes that this policy is intended to prevent duplication, strengthen continuity, and ensure that uncompleted projects are not abandoned.
Budget Submission and Oversight
MDAs are required to submit their budgets through the GIFMIS Budget Preparation Subsystem, while government-owned enterprises (GOEs), will submit via the Budget Information Management and Monitoring System. All submissions were required by Tuesday, December 9, 2025.
Personnel costs have already been calculated using data from IPPIS and prior submissions, with each ministry informed of its personnel cost ceiling for 2026.
Fiscal Outlook and Projections
The circular comes with a set of conservative fiscal projections, reflecting tighter revenue and rising debt pressures:
| Category | 2025 (N) | 2026 (N) |
|---|---|---|
| Statutory transfers | 3.64tn | 3.15tn |
| Recurrent non-debt expenditure | – | 15.26tn |
| Debt service obligations | 13.94tn | 15.52tn |
| Aggregate capital expenditure | 26.19tn | 22.37tn |
| Capital allocations for MDAs | 12.39tn | 8.67tn |
| Project-tied loans | 3.36tn | 2.05tn |
| Deficit | 14.10tn | 20.12tn |
| Total funds available (including GOEs) | 54.99tn | 54.46tn |
These projections underscore the government’s cautious approach. Capital allocations for MDAs fall sharply, while debt service obligations rise, highlighting the need for fiscal prudence.
Rationale
The government has framed the rollover policy as a measure to enhance budget credibility and discipline, prevent wastage, and ensure that strategic projects under the Medium-Term Expenditure Framework (2026–2028), the Renewed Hope Infrastructure Development Plan, the Ward Development Plan, the National Development Plan, and the Accelerated Stabilisation and Actualisation Plan are delivered.
By deferring 70 per cent of 2025 allocations, the FG aims to balance fiscal pressures with the imperative to complete critical projects — a move that analysts say could normalise budget implementation and reduce uncompleted, abandoned initiatives.
Concerns
Despite the logic behind the directive, concerns remain:
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Some stakeholders warn that rolling over such a significant portion of the 2025 budget could delay project delivery and create uncertainty for contractors and service users.
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Limiting overhead to 2025 levels may risk underfunding essential operations across MDAs, especially in an inflationary environment.
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Critics also note that compressing budget submissions into a rollover framework may undermine transparency and weaken the predictability of annual budgeting cycles.
Implications
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For MDAs and Contractors: Projects may extend into 2026, potentially delaying completion and payments.
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For Citizens: Infrastructure and service delivery may be slower, affecting communities awaiting development benefits.
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For Fiscal Governance: The rollover may improve discipline, avoid duplication, and help the government manage cash flows.
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For the Economy: By restraining new commitments and focusing on existing projects, the government may reduce borrowing pressure while navigating revenue constraints.
The directive represents a significant shift in our budgetary approach, reflecting fiscal realities and the government’s emphasis on strategic project delivery. Whether this cautious and structured approach will translate into timely project completion remains a critical question for 2026.
May Nigeria succeed.
