The Nation Newspaper

Tag: Tanimu Yakubu

  • Fed Govt wraps up new three-year expenditure plan

    Fed Govt wraps up new three-year expenditure plan

    The Federal Government has concluded arrangements for a new expenditure framework, which will form the basis for budgeting over the next three years.

    The new plan, the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) 2026–2028, could be presented to the Federal Executive Council (FEC) this week, signalling the start of the budget preparation process for 2026.

    Director General, Budget Office of the Federation (BOF), Dr Tanimu Yakubu, who confirmed the development, said that the current budget cycle requires strict adherence to statutory timelines.

    According to him, since both the 2024 and 2025 budgets statutorily terminate on December 31, 2025, it becomes imperative for the government to move quickly.

    He said that the MTEF-FSP “is ready and can be presented to the Federal Executive Council at any moment,” adding that the document will thereafter be transmitted to the National Assembly for consideration.

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    He explained that once lawmakers approve the Revenue and Expenditure Framework for 2026, 2027 and 2028, “the 2026 Appropriation Bill will move to the FEC for consideration and then be transmitted to the National Assembly.”

    He noted that a credible assessment of the fiscal deficit is essential before meaningful work can begin.

    He said: “It is essential to first establish the fiscal deficit position before work could meaningfully begin on both the MTEF/FSP and the annual budget. This sequencing ensures that all fiscal projections, policy assumptions, and expenditure plans are anchored on a credible assessment of the government’s financing gap and revenue realities”.

    An official of the Budget Office told The Nation that immediately after FEC considers the MTEF, a budget call circular will be issued to Ministries, Departments and Agencies (MDAs), marking the formal commencement of preparations for the 2026 national budget. The official disclosed that limited fiscal space means many of the projects in next year’s estimates will be carried over from 2025.

    He said: “After the MTEF goes to council, the call circular will be issued to MDAs to prepare their budget, and since most of the projects will come from their 2025 budget, it wouldn’t take time to assemble that together, because there is not much money actually to give them for many projects. So definitely, the budget will be presented in December, just like last year”.

    He explained that the MTEF remains the anchor of every budget cycle because it sets macroeconomic parameters.

    “MTEF has not yet gone to council. So the first thing is, there will always be discussions on MTEF because MTEF forms the foundation of the budget. If the revenue estimation in the MTEF is not looking like what supports the level of spending the government desires, then there will be changes in the parameters — the exchange rate, production benchmark, here and there,” the official stated.

    Once the National Assembly approves the MTEF-FSP, MDAs may be directed to roll over a large share of their 2025 projects into the 2026 fiscal year.

    He said: “MDAs now may be advised to roll over around 70 percent of their 2025 to 2026. Implementation of the 2025 budget can still continue maybe into the first quarter of 2026. So, the accountant general will close the books of those accounts”.

    He noted that all releases for the 2025 budget will be issued before the end of December 2025, while implementation will extend into early 2026. “They can close the books and the remaining 70 percent can now be rolled over. They will use the projects in their 2025 budget to prepare their 2026,” he added. However, the actual rollover percentage will depend on the funding envelope allocated to each MDA.

    The official expressed concern over the rising cost of debt service, describing it as a major constraint on the government’s fiscal flexibility. “Debt service is now very significant. As you depreciate the naira, the foreign currency-denominated debt service becomes more expensive when you convert to Naira,” he said. “It is in billions of dollars and trillions of naira. The fiscal space is very narrow now. The amount available for MDAs to implement their projects is becoming narrower and narrower.”

  • Why Fed Govt is running three budgets simultaneously, by Budget Office

    Why Fed Govt is running three budgets simultaneously, by Budget Office

    The concurrent operation of three budgets is a deliberate strategy to ensure the delivery of appropriated capital projects, the Federal Government has said.

    Director General, Budget Office of the Federation, Tanimu Yakubu, yesterday provided clarity on the multi-budget operations.

    The 2024 Appropriation Act, 2024 supplementary budget, and 2025 Appropriation Act are running simultaneously.

    The National Assembly this week extended the capital vote component of the 2024 budget till December 31.

    According to Yakubu, the development is not a sign of fiscal confusion but a deliberate response to real-world economic and administrative realities.

    Addressing public concerns over the overlapping fiscal instruments, Yakubu said that while the simultaneous operation of multiple budgets may appear unconventional, it is legally grounded and administratively necessary.

    “It reflects the real-world overlap between budget law, execution delays, and system-wide reform efforts,” Yakubu said.

    He said the concurrent implementation of budgets is not outside the bounds of national laws and conforms to global best practices.

    He outlined that the Finance Act, Appropriation Act clauses, and Central Bank of Nigeria’s circulars provide the legal basis for this coexistence by allowing rollover of capital releases across fiscal years; cash-flow bridging to support early implementation of new budgets; and parallel accounting for complex or externally-financed infrastructure and social programmes.

    He said: “This is not fiscal dysfunction—it is the transitional cost of trying to modernise a complex, high-volume national budget system.”

    He described the current situation as “institutional flexibility in managing fiscal transitions”, noting that the critical issue should not be the number of budgets being operated but the coordination and transparency in their execution.

    “What’s in operation now is a reforming system, not a chaotic one.

    “The 2025 budget is being implemented in earnest, while residuals from the 2024 and Supplementary Budgets are lawfully closed out and disbursed.

    “This is part of building a more agile and accountable public finance framework.

    “Nigeria’s overlapping budget operations are legal under current fiscal statutes, technically necessary due to multi-year projects and delayed implementation, and comparable to practices in other countries navigating budget reform and absorptive constraints,” Yakubu said.

    He explained that the 2024 Appropriation Act, which was signed by the President in January 2024, was valid until December 31, 2024, but it remains the primary legal framework for federal spending in 2024 and thus continued to be active, especially for capital projects, statutory obligations, and contracts tied to 2024 project codes.

    To bridge gaps that arose after the approval of the main budget, the Federal Government introduced a Supplementary Appropriation Act mid-year.

    Yakubu explained that the supplementary budget was necessary to address escalating security and humanitarian demands, revenue windfalls or reallocations, and emerging economic shocks and sectoral urgencies not accounted for in the main budget.

    He pointed out that such amendments are standard practice globally, pointing out that a supplementary budget amends or extends the main budget, running concurrently, not as a duplicate, but as a legal fiscal continuation.

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    Regarding the 2025 Appropriation Act, Yakubu noted that while it was signed before the end of 2024 to maintain the January to December budget cycle, its execution began alongside ongoing disbursements from the 2024 and supplementary budgets.

    He said: “The transition hasn’t been seamless. Execution of the 2025 budget coexists with unspent but already committed capital allocations from 2024, procurement delays and disbursement lags; and multi-year or donor-funded projects that legally span two or more fiscal years.

    “This situation is not unique to Nigeria. In India, Indonesia, and Kenya, similar overlaps occur as governments reconcile planning cycles with execution realities.”

    Our positions,  by experts

    Economic experts said there were underlying issues that could have caused the overlapping of budgets but called for reforms to align budget to a fiscal circle and feasible revenue profile.

    Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said capital budget has a long history of underperformance, which needs to be reversed.

    According to him, there were number of factors that could be responsible for budget extension including collapse of underlying revenue assumption and overambitious budgeting. 

     “First is possible collapse of the underlying revenue assumptions in successive budgets.  It is worthy of note that revenue performance in 2024 was far below target.  This could be as a result of the forward sales of crude oil as well as failure to achieve the oil production target which was about two million barrels per day.

    “There is also the possibility that the budget itself was ambitious.  It is also troubling that debt service obligations are increasingly taking a huge toll on the fiscal space. The rolling over of capital budget implementation is the outcome of this reality.

    “It’s perhaps time to reform the budget process to make our budgets more realistic.  Capital projects should be strictly aligned with the realistic capacity to fund them.

     “It is hoped that the tax reforms would accelerate the fiscal consolidation aspirations of government,” Yusuf said.