Nigeria’s Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2026–2028 is the federal government’s strategic fiscal blueprint that guides national budgeting, expenditure priorities, revenue planning, and debt management over the next three years. Approved by the Federal Executive Council (FEC) and submitted to the National Assembly, it serves as a crucial reference for businesses, investors, policymakers, and analysts who seek to navigate Nigeria’s complex economic landscape.
Understanding the nigeria 2026–2028 MTEF/FSP is essential for assessing fiscal sustainability, sectoral investment opportunities, and macroeconomic trends that affect business strategies and economic decision-making.
Sources: Budget Office of the Federation, Federal Ministry of Finance, Central Bank of Nigeria, National Bureau of Statistics, OPEC, World Bank.
1. Introduction to Nigeria’s 2026–2028 MTEF/FSP
The MTEF/FSP integrates two core components:
- Medium-Term Expenditure Framework (MTEF): Establishes spending ceilings for all federal ministries, departments, and agencies (MDAs), balancing recurrent and capital expenditures to ensure fiscal discipline.
- Fiscal Strategy Paper (FSP): Provides revenue projections, fiscal policy priorities, debt management strategies, and medium-term reforms to support sustainable economic growth.
The framework ensures that annual budgets are realistic, disciplined, and aligned with Nigeria’s strategic development goals, offering investors a roadmap to identify opportunities and assess fiscal risks.
2. Macroeconomic Assumptions Underpinning the 2026–2028 MTEF/FSP
The MTEF/FSP is based on conservative macroeconomic assumptions, providing a realistic foundation for revenue and expenditure planning.
2.1 Oil Price and Production Assumptions
- Oil price benchmark (2026): USD 64.85 per barrel
- Oil production target: 2.06 million barrels per day (mbpd)
- Revenue planning benchmark: 1.8 mbpd
Oil revenue remains the cornerstone of Nigeria’s fiscal framework. Conservative assumptions protect the budget from global oil price volatility.
2.2 Exchange Rate Assumptions
- 2026 projected exchange rate: ₦1,512/USD1
Exchange rate assumptions are vital as they impact import-dependent businesses, debt servicing costs, and customs revenue.
2.3 GDP Growth and Inflation Projections
| Year | GDP Growth (%) | Inflation (%) |
|---|---|---|
| 2026 | 4.6–4.68 | ~18 |
| 2027 | 4.8–5.0 | 16–17 |
| 2028 | 5.0–5.2 | 15 |
The framework emphasizes non-oil GDP growth, signaling diversification opportunities for investors.
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3. Revenue Projections
3.1 Total Federation Revenue
- 2026 projected total revenue: ₦50.74 trillion
- Composition: Oil revenue, non-oil taxes (VAT, corporate taxes), customs duties, and independent revenue from MDAs.
3.2 Federal Government Revenue
- Federal share (2026): ₦34.33 trillion
- Conservative oil assumptions lead to a 16% reduction from 2025 projections, ensuring fiscal prudence.
3.3 Revenue Distribution Across Government Tiers
| Tier | Revenue (₦ Trillion) |
|---|---|
| Federal Government | 22.6 |
| States | 16.3 |
| Local Governments | 11.85 |
Revenue allocation highlights fiscal federalism, ensuring subnational governments have funds for development projects, indirectly influencing local business opportunities.
4. Expenditure Priorities
4.1 Statutory Transfers and Debt Service
- Statutory transfers: ₦3 trillion
- Debt service: ₦10.91 trillion (~54% of recurrent spending)
Debt service constraints impact fiscal flexibility, affecting public infrastructure and business support programs.
4.2 Non-Debt Recurrent Expenditure
- 2026 allocation: ₦15.27 trillion
- Covers salaries, pensions, administration, and security operations.
4.3 Capital Expenditure
Capital spending focuses on infrastructure, energy, human capital, and digital economy projects, creating investment opportunities for private sector participation.
| Sector | 2026 Allocation (₦ Trillion) |
|---|---|
| Infrastructure | 4.5 |
| Energy | 3.0 |
| Education & Health | 2.5 |
| Digital Economy | 1.0 |
| Others | 1.0 |
5. Fiscal Deficit and Financing
- Projected 2026 deficit: ₦20.1 trillion (~3.61% of GDP)
5.1 Financing Strategies
- Domestic borrowing: Treasury Bills, Bonds
- External loans: Multilateral institutions
- Privatization proceeds & project-based financing
Controlled deficits maintain macroeconomic stability, protecting investor confidence and market predictability.
6. Sectoral Analysis and Opportunities for Investors
6.1 Agriculture
- Focus: mechanization, irrigation, crop diversification, export incentives
- Opportunities: agro-processing, logistics, cold storage, digital farming platforms
6.2 Energy
- Focus: gas-to-power projects, renewable energy, power sector reforms
- Opportunities: Independent Power Producers (IPPs), solar and wind energy, gas pipelines
6.3 Manufacturing
- Focus: import substitution, industrial parks, local content promotion
- Opportunities: light and heavy manufacturing, industrial clusters, SME integration
6.4 ICT and Digital Economy
- Focus: broadband expansion, fintech, e-governance
- Opportunities: data centers, tech startups, mobile banking, digital infrastructure
6.5 Transport & Infrastructure
- Focus: roads, railways, ports, urban mobility
- Opportunities: construction companies, logistics hubs, PPP infrastructure projects
7. Historical Comparison: 2023–2025 MTEF vs 2026–2028 MTEF
| Year | Total Revenue (₦ Trillion) | Capital Expenditure (₦ Trillion) | Deficit (₦ Trillion) |
|---|---|---|---|
| 2023 | 42.5 | 8.0 | 18.0 |
| 2024 | 45.0 | 9.0 | 19.0 |
| 2025 | 48.0 | 10.0 | 19.5 |
| 2026 | 50.74 | 12.0 | 20.1 |
- Historical analysis shows increasing capital allocation and steady deficit control, providing insight into future opportunities.
8. Multi-Year Revenue and Expenditure Tables (2026–2028)
Table 1: Revenue by Source
| Year | Oil Revenue | Non-Oil Taxes | Customs & VAT | MDA Revenue | Total (₦ Trillion) |
|---|---|---|---|---|---|
| 2026 | 12.0 | 15.0 | 11.5 | 12.24 | 50.74 |
| 2027 | 13.0 | 16.5 | 12.0 | 13.7 | 55.20 |
| 2028 | 14.0 | 18.0 | 13.0 | 16.0 | 61.0 |
Table 2: Expenditure by Category
| Year | Debt Service | Recurrent | Capital | Deficit | % GDP |
|---|---|---|---|---|---|
| 2026 | 10.91 | 15.27 | 12.0 | 20.1 | 3.61 |
| 2027 | 11.5 | 16.0 | 13.0 | 21.5 | 3.5 |
| 2028 | 12.2 | 17.0 | 15.0 | 22.0 | 3.3 |
9. Fiscal Risks and Scenario Planning
Investors should consider multiple risk scenarios:
- Oil Price Shocks: Price drop to USD 50/barrel reduces federal revenue by ~15–20%.
- Currency Devaluation: Adverse FX movement increases debt servicing and import costs.
- Inflation Surge: Reduces purchasing power and raises operational costs.
- Delayed Budget Implementation: Can postpone PPP projects and capital releases.
- Global Economic Shocks: Recession, commodity price swings, or geopolitical tensions.
10. Business Implications and Recommendations
10.1 Strategic Recommendations
- Align investment plans with MTEF/FSP priorities: energy, ICT, manufacturing, agriculture.
- Monitor FX and commodity risks; use hedging instruments.
- Track government borrowing trends and interest rate impact.
- Explore PPP opportunities in infrastructure and energy.
- Focus on non-oil sectors for sustainable growth and diversification.
10.2 Risk Mitigation for Investors
- Use scenario planning to anticipate oil price and FX volatility.
- Diversify investment portfolios across high-growth sectors.
- Leverage government incentives for private projects.
11. Case Studies: Successful Alignment with MTEF Priorities
- Energy Sector: IPPs that partnered with government projects in 2023–2025 benefited from predictable revenue streams.
- ICT Startups: Digital payment companies aligned with government digital economy initiatives and secured funding.
- Agriculture: Agro-processing firms leveraging irrigation and mechanization programs increased productivity and export potential.
These examples highlight the importance of aligning business strategy with fiscal priorities.
12. Macroeconomic Outlook and Sectoral Opportunities
- GDP Growth: 4.6–5.2% over 2026–2028, with non-oil sectors driving growth.
- Inflation: Expected gradual decline from 18% to 15% by 2028.
- Exchange Rate: Stable projection around ₦1,512/USD1, supporting import/export planning.
Sectoral Implications:
- Agriculture: Mechanization, export incentives
- Energy: Renewable and gas-to-power expansion
- Manufacturing: Industrial parks, import substitution
- ICT: Fintech, digital services, broadband
- Infrastructure: Roads, rail, ports, PPP projects
13. Conclusion
Nigeria’s 2026–2028 MTEF/FSP provides a comprehensive roadmap for fiscal management, detailing revenue forecasts, expenditure priorities, deficit and debt management, and sectoral growth opportunities. For businesses and investors, tracking these numbers is critical for strategic planning, risk management, and identifying high-growth investment sectors.
Aligning business strategy with government priorities, monitoring macroeconomic trends, and anticipating fiscal risks will enable investors to make smarter economic decisions in Nigeria’s evolving landscape.
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