Press Release - ActionAid Nigeria Flags Fiscal Sustainability and Social Sector Gaps in the 2026 Appropriation Bill

Abuja, 30th December 2025 – ActionAid Nigeria has reviewed the Federal Government of Nigeria’s 2026 Appropriation Bill, which proposes a total expenditure of ₦58.18 trillion, representing a 5.8 percent increase over the 2025 approved budget. While the increase reflects an intention to maintain government programs, the financing structure, level of deficit, and sectoral allocations raise serious concerns about fiscal sustainability, rising public debt, and the marginalisation of sectors essential for poverty reduction and inclusive development.

ActionAid Nigeria recognizes that, to address the long-standing challenge of multiple budget implementation, the Federal Government revised the 2024 Appropriation Act by increasing the budget size by 24.26 percent from ₦35.06 trillion to ₦43.56 trillion and extended its implementation to 31 December 2025. Also, the implementation of the 2025 budget was extended to 31 March 2026, while its size was reduced by 12.13 percent, from ₦54.99 trillion to ₦48.32 trillion. While these measures may appear corrective, ActionAid Nigeria is concerned that extending budget timelines without robust parliamentary scrutiny opens the door to off-budget spending and weak accountability, especially for capital projects approved under the 2024 budget.

Similarly, the Federal Government’s decision to increase the proposed 2026 budget by 5.8 percent over the 2025 approved budget suggests continuity in government programmes. ActionAid Nigeria notes that the 2026 fiscal year will be implemented alongside the extended 2024 and 2025 budgets. The effective operation of three federal budgets concurrently undermines transparency, weakens legislative oversight, and heightens the risk of misallocation and misuse of public resources, particularly for capital and social sector projects.  ActionAid Nigeria further observes that the persistent extension of budget timelines is not driven by executive actions alone. The National Assembly’s post-submission alterations to budget proposals, including significant upward revisions to sectoral allocations without corresponding and secured financing plans have repeatedly contributed to artificial funding gaps. These gaps often result in delayed releases, partial implementation, and the rollover of capital projects into subsequent fiscal years. This practice undermines budget credibility, distorts development priorities, and entrenches the cycle of multiple budgets operating concurrently.

ActionAid Nigeria maintains that these measures are merely stop-gap and cosmetic, and do not address the structural weaknesses driving Nigeria’s recurring budget failures. Ending the practice of running multiple budgets will require firm legal and institutional reforms, including amendments to the Fiscal Responsibility Act (FRA) 2007 to strengthen the mandate of the Fiscal Responsibility Commission and enable it to enforce budget timelines. In addition, constitutional reforms are necessary to remove existing ambiguities in budget preparation, approval, implementation, and audit, drawing lessons from countries such as Uganda, where budget timelines are clearly defined and enforced.

It is against this context of weak fiscal governance that the 2026 proposed budget projects a federally retained revenue of ₦34.33 trillion, against total expenditure of ₦58.18 trillion, resulting in a deficit of ₦23.85 trillion. This represents a 69 percent increase over the 2025 deficit and a 160 percent increase over the 2024 deficit, making it the largest fiscal deficit in Nigeria’s history. ActionAid Nigeria cautions that continued reliance on borrowing, without deliberate investment in productive sectors and social services, will further constrain fiscal space, deepen inequality, worsen poverty, and ultimately undermine long-term development outcomes.

Although the government claims that security, infrastructure, education, health, and agriculture are priority areas of the 2026 budget, allocations to critical social sectors remain grossly inadequate when measured against national needs and global commitments. The Education sector is allocated ₦3.52 trillion, representing 6.05 percent of the total budget, which is well below the 15–25 percent benchmark recommended by UNICEF for achieving Sustainable Development Goal 4. The health sector receives ₦2.48 trillion, amounting to 4.26 percent of total expenditure, which falls significantly short of the 15 percent commitment under the Abuja Declaration. In contrast, Defence is allocated ₦5.41 trillion, which is 9.30 percent of the total budget. This reflects disproportionate funding and releases to critical social services that directly impact citizens’ well-being.

The implications of the proposed 2026 budget for livelihoods, underemployment, and the quality of work available to Nigerians are particularly concerning, especially for women and rural populations. According to the National Bureau of Statistics (Q1 2024), rural employment-to-population ratios stand at 78.9 percent, compared to 69.5 percent in urban areas, with women more likely than men to be engaged in self-employment (87.9 percent versus 79.9 percent). Although self-employment is a vital livelihood strategy for millions of women, its predominantly informal and low-productivity character points to persistent gaps in public investment and economic support. From AAN’s analysis, the 2026 budget fails to make adequate investments in agriculture accordingly to the Maputo declaration, women-led enterprises, rural infrastructure, and value-chain development that could address underemployment and create decent work.  

ActionAid Nigeria is equally concerned about the weak prioritisation of social protection, at a time when millions of Nigerians are struggling with rising food prices, unemployment, and declining purchasing power. Social protection programmes, including cash transfers, school feeding, and support for smallholder farmers, are not welfare handouts; they are essential tools for protecting livelihoods, keeping children (especially girls) in school, improving nutrition, and enabling women to participate meaningfully in the economy. Inadequate funding and delayed releases for these programmes risk pushing already vulnerable households further into poverty. 

Furthermore, the delayed submission of the Medium-Term Expenditure Framework (MTEF), Fiscal Strategy Paper (FSP), and the 2026 Appropriation Bill, all presented in December 2025, constitutes a clear violation of the Fiscal Responsibility Act (FRA), 2007. This recurring breach of the legal budget timeline reflects systemic weaknesses in budget planning and implementation.

In light of these concerns, ActionAid Nigeria urges the National Assembly, the Federal Government, and all relevant stakeholders to take urgent and decisive action to address the key shortcomings in the 2026 Appropriation Bill. The following issues require immediate attention:

• The Federal Government and the National Assembly must jointly end the routine extension of budget timelines and the practice of running multiple budgets. This requires strict adherence to approved fiscal calendars, restraint in post-submission budget expansions by the legislature, and the approval of only those allocations that are backed by realistic and verifiable financing plans.
• The National Assembly should insist on full legislative disclosure and justification for any proposed budget rollovers or extensions, including detailed reporting on unimplemented capital projects. This is necessary to prevent public funds for social services and development priorities from being arbitrarily diverted, delayed, or mismanaged, and to ensure transparency, accountability, and proper oversight of government spending.
• The Federal Government should present timely budget performance reports for preceding years before any new budget is submitted, so that lawmakers and citizens can assess how revenues were collected and spent and hold public officials accountable for performance gaps.
• The Federal Government should reduce reliance on borrowing and implement enforceable fiscal discipline measures. The 2026 Appropriation Bill must be adjusted to prevent the escalation of public debt and ensure that government spending remains sustainable and aligned with the country’s revenue realities, while redirecting resources toward productive sectors that create jobs and eliminate poverty.
• The National Assembly should demand clear measures to protect critical social and development sectors from being crowded out by debt obligations, safeguarding resources for programmes that directly impact citizens’ wellbeing.
• There should be a substantial increase in allocations and timely releases to capital projects and social sectors, including health, education, agriculture, humanitarian affairs, women’s affairs, youth development, and social investment programmes.
• The 2026 Appropriation Bill should prioritise allocations and timely releases to sectors that promote human development and social protection, ensuring the safety and well-being of all Nigerians.
• The National Assembly should amend the Fiscal Responsibility Act and relevant sections of the Constitution, including Section 81(1), to enforce the timely submission of the MTEF, Fiscal Strategy Paper, and Appropriation Bill. 

ActionAid Nigeria reiterates that the national budget is a reflection of government priorities and a critical instrument for fulfilling citizens’ rights. A 2026 budget that continues to prioritise debt servicing and recurrent expenditure over human development will deepen inequality, entrench poverty, and weaken social cohesion. The Federal Government and the National Assembly must therefore demonstrate political will by reordering spending priorities, strengthening fiscal accountability, and investing public resources in sectors that directly improve the lives and livelihoods of Nigerians. Nigeria cannot borrow its way out of poverty; only a people-centred, equitable, and accountable budget can deliver inclusive development and restore public trust in governance.

#END

Signed

Andrew Mamedu PhD.

Country Director, ActionAid Nigeria