In a significant move aimed at strengthening fiscal planning amid global economic uncertainty, the Senate has approved a reduction of the crude oil price benchmark to $60 per barrel for the 2026 fiscal year as part of its consideration of the Medium-Term Expenditure Framework (MTEF), and Fiscal Strategy Paper (FSP), for 2026–2028.
The move followed recommendations by the Senate Committee on Finance, presented during extended plenary by its chairman, Senator Sani Musa (APC, Niger East). In his explanation, Senator Musa emphasized that the reduction was made in recognition of global geopolitical tensions in Europe and the Middle East and the resulting sensitivity of global crude oil prices.
The committee also proposed adjustments for the 2027 and 2028 oil price benchmarks from $64.30 and $65.50 per barrel to $65 and $70 per barrel, respectively, which were approved by the Senate.
Production and Macroeconomic Projections
While adjusting the oil price benchmark, the Senate sustained domestic crude oil production projections, setting them at:
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1.84 million barrels per day (mbpd) in 2026
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1.88 mbpd in 2027
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1.92 mbpd in 2028
This reflects confidence in ongoing reforms and efforts to stabilise oil output.
The Senate also endorsed macroeconomic assumptions in line with the Central Bank of Nigeria’s policy direction, including:
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Exchange rates: ₦1,512/USD in 2026, ₦1,432.15/USD in 2027, and ₦1,383.18/USD in 2028
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Inflation: 16.5% in 2026, 13% in 2027, and 9% in 2028
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Real GDP growth: 4.68% in 2026, 5.96% in 2027, and 7.9% in 2028
These projections are anchored on the commitment of monetary authorities to tame inflationary pressures and the anticipated benefits of ongoing economic and tax reforms expected to take firmer effect from 2026.
Fiscal Operations and Budget Framework
The Senate approved the 2026 Federal Government budget framework with a total expenditure of ₦54.46 trillion, broken down as follows:
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FGN retained revenue: ₦34.33 trillion
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New borrowings (domestic and foreign): ₦17.88 trillion
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Debt service obligations: ₦15.52 trillion
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Pensions, gratuities, and retirees’ benefits: ₦1.376 trillion
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Fiscal deficit: ₦20.13 trillion
Capital expenditure, exclusive of transfers, was maintained at ₦20.131 trillion, while statutory transfers were pegged at ₦3.152 trillion, and a Sinking Fund provision at ₦388.54 billion.
Total recurrent (non-debt) expenditure was approved at ₦15.265 trillion, with special intervention funds set at ₦200 billion for recurrent and ₦14 billion for capital spending.
Revenue Reforms and Policy Measures
A major plank of the committee’s report emphasized the effective implementation of newly enacted Tax Acts as critical instruments for economic reform and growth. The Senate recommended that the Federal Government implement a National Scanning Policy within the National Single Window of the Nigerian Revenue Service, in collaboration with relevant agencies.
The policy aims to enhance revenue assurance, improve trade facilitation, reduce leakages, strengthen transparency, and bolster national security.
Conclusion and Senate Remarks
In concluding remarks, the Finance Committee expressed profound appreciation to the Senate for their commitment to this critical national assignment. They highlighted that diligent implementation of these recommendations would serve as a catalyst for sustainable economic prosperity in Nigeria.
Senate President, Senator Godswill Akpabio, commended the committee for a job well done, describing their efforts as a veritable platform for the presentation of the 2026 budget by President Tinubu before December 31, 2025.
Implications
The Senate’s decision to reduce the oil price benchmark demonstrates prudent fiscal management, balancing optimism with realism amid global uncertainties.
By anchoring the budget to conservative oil revenue estimates while sustaining domestic production and macroeconomic projections, the Senate aims to strengthen budget credibility, reduce fiscal risks, and support economic stability over the medium term.
