Senate cuts oil benchmark to $60, passes 2026–28 MTEF/FSP to cushion global shocks

…backs N54.46trn 2026 spending plan

…sustains 1.84mbpd output, N1,512/$ exchange rate

The Senate on Tuesday approved the 2026–2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), cutting Nigeria’s crude oil benchmark to $60 per barrel for 2026 in a move lawmakers said was aimed at shielding the economy from global volatility.

The approval followed the presentation and consideration of a report by Sani Musa (APC, Niger East), the Chairman of the Senate Committee on Finance, who said the committee reviewed the Federal Government’s oil price assumptions against prevailing global risks.

Presenting the report, Musa said the adjustment became necessary “in recognition of the global geopolitical tensions in Europe and the Middle East and the sensitivity of global crude oil prices.”

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Under the revised framework, the Senate reduced the executive’s proposed oil price benchmarks of $64.85, $64.30 and $65.50 per barrel for 2026, 2027 and 2028 to $60 for 2026, $65 for 2027 and $70 for 2028.

Musa told lawmakers that the decision was guided by caution and fiscal realism.

“Given the uncertainties in the global oil market and geopolitical risks, the committee resolved that the crude oil benchmark be reviewed downward to reflect current realities,” he said.

Despite the more conservative oil price outlook, the Senate sustained crude oil production projections of 1.84 million barrels per day (mbpd) for 2026, 1.88 mbpd for 2027 and 1.92 mbpd for 2028, expressing confidence in ongoing sector reforms and efforts to stabilise output.

The chamber also retained key macroeconomic assumptions, including exchange rate projections of N1,512/$ for 2026, N1,432.15/$ for 2027 and N1,383.18/$ for 2028, aligning with the Central Bank of Nigeria’s policy direction to stabilise the naira through improved fiscal and monetary coordination.

Inflation is projected to ease gradually over the medium term, with rates of 16.5 per cent in 2026, 13 per cent in 2027 and 9 per cent in 2028.

These projections, the committee chairman said, were based on “the commitment of the monetary authorities to moderate inflationary pressures.”

On growth, the Senate endorsed projected real GDP growth rates of 4.68 per cent for 2026, 5.96 per cent for 2027 and 7.9 per cent for 2028, citing expected gains from ongoing economic reforms and tax policy changes.

“The committee recommends that the projection for real GDP be sustained in anticipation of the gains of tax reforms,” Musa said.

The approved framework pegs total Federal Government expenditure for 2026 at N54.46 trillion, with retained revenue estimated at N34.33 trillion and a fiscal deficit of about N20.13 trillion.

New borrowingsboth domestic and foreign, were put at N17.88 trillion, while debt service obligations stood at N15.52 trillion.

Capital expenditure (exclusive of transfers) was sustained at N20.13 trillion, alongside statutory transfers of N3.15 trillion and a sinking fund provision of N388.54 billion.

Total recurrent (non-debt) expenditure was estimated at N15.27 trillion, with special intervention funds of N200 billion for recurrent spending and N14 billion for capital projects.

Beyond the numbers, the Senate urged the Federal Government to ensure “effective implementation of the new Tax Acts as veritable instruments for economic reforms, growth and development.”

It also recommended the adoption of a National Scanning Policy within the National Single Window of the Nigeria Revenue Service to enhance revenue assurance, reduce leakages, improve trade facilitation and strengthen transparency and national security.

The MTEF/FSP was transmitted to the National Assembly by President Bola Tinubu on December 11, 2025, and referred to the Senate Committee on Finance, which held interactive sessions with relevant ministries, departments, agencies and government-owned enterprises before submitting its report for approval by the chamber.