E-Financial
Nigeria’s N58.18trn Budget and Rising Cost of Deficit Governance
By Blaise Udunze
When President Bola Tinubu presented the N58.18 trillion 2026 Appropriation Bill to the National Assembly, unbeknownst to some, it opened with a contradiction that should unsettle even its most optimistic readers. It is an irony that a budget promises consolidation, renewed resilience, and shared prosperity, at the same time, it is built on a deficit of N23.85 trillion, as the largest budget in the nation’s history, equivalent to 4.28 percent of GDP, financed largely through borrowing, and debt servicing alone will consume N15.52 trillion, nearly half of the projected revenue.
President Tinubu
What a contradiction! The reality today is that Nigeria is borrowing not primarily to expand productive capacity or unlock long-term growth, but to keep the machinery of the state running. Salaries, overheads, inherited liabilities, and interest payments increasingly define the purpose of new debt. Capital formation, though loudly advertised, struggles to keep pace with fiscal reality. This raises a fundamental and unavoidable question. How sustainable is a fiscal model where debt service crowds out development spending year after year? Until this question is convincingly answered, no amount of reform rhetoric can restore confidence in Nigeria’s budgeting process.
A Nation Drowning in Deficits and Debt
The problem with the deficit is that it is not a number by itself. It shows that there are problems with the way things are set up. By the middle of 2025, Nigeria owed a lot of money, N152.4 trillion, which represented about a 348.6 percent increase following the assumption of President Bola Tinubu into office in 2023. Before he assumed office, the country owed N33.3 trillion, and this is a country that was already having trouble paying for basic things it needed to.
Reflecting on Nigeria’s predicament, it mirrors a wider African crisis. Reviewing the occurrences across the continent of Africa, external debt now surpassed $1.3 trillion, while the debt servicing costs are estimated at $89 billion this year alone. Nigeria’s case is unique not because of the amount of debt, but because of its poor productive return. The lingering challenge is that Nigeria’s borrowing has skyrocketed, yet the economy remains conspicuously faced with fragile infrastructure. The fiscal irony is stark that Nigeria is borrowing to survive, not to thrive.
A Deficit-Fuelled Budget and the Rising Cost of Survival
Deficits can be useful tools when deployed strategically. But Nigeria’s deficits have become structural, persistent, and increasingly divorced from growth outcomes. The N23.85 trillion deficit in the 2026 budget represents a dramatic escalation from the N11-N12 trillion range of recent years. Analysts warn that this is no longer a counter-cyclical policy; it is a sign of fiscal stress. Tilewa Adebajo, Chief Executive Officer of CFG Advisory, describes Nigeria’s fiscal space as “the biggest threat to our economic recovery.” According to him, the country continues to expand its budget despite failing to meet revenue targets. “We cannot have a N23 trillion deficit, that’s not sustainable,” he warned, noting that deficits have doubled in just a few years. More troubling is what the deficit implies. With N15.52 trillion earmarked for debt servicing, nearly half of the projected revenue is already spoken for before development spending begins. Some estimates suggest that over 25 percent of Nigeria’s annual revenue now goes directly into debt servicing, and in certain months, the ratio rises far higher. Experts warn that when over 90 percent of revenue is consumed by old debts, governance becomes an exercise in survival rather than progress. This is the fiscal corner Nigeria is steadily backing itself into.
Borrowing to Run Government, Not to Build the Economy
Between July and October 2025 alone, Nigeria secured over $24.79 billion in new borrowings, alongside €4 billion, ¥15 billion, N757 billion, $500 million in sukuk, and other facilities, most justified as “development financing.” Yet the real sector continues to wait for a tangible impact. The African Democratic Congress (ADC) argues that a budget planning to generate N34 trillion in revenue while borrowing nearly N24 trillion amounts to an admission of fiscal insolvency. A deficit-to-revenue ratio approaching 70 percent, it insists, would be unacceptable in any functional fiscal system. While opposition language is often sharp, the underlying concern is valid. Borrowing makes economic sense only when it finances self-liquidating projects like investments that generate revenue to repay the loans. Instead, Nigeria increasingly borrows to service past debts and plug recurrent expenditure gaps. Uche Uwaleke, Professor of Finance and Capital Markets at Nasarawa State University, underscores the danger: “Nigeria’s debt service ratio is inimical to economic development, chiefly because what could have been used to build infrastructure and invest in human capital is used to service debt. The opportunity cost for the country is high.” In effect, debt has shifted from a development instrument to a fiscal life support system.
Revenue Projections Caught Between Reform Ambition and Structural Limits
The Nigerian government projected N34.33 trillion in revenue for 2026, which is squarely anchored on improved oil output, non-oil tax reforms, and digitised revenue mobilisation across Government-Owned Enterprises (GOEs). To actualize its target, President Tinubu vowed to clamp down on leakages, enforce performance targets, and deploy real-time monitoring systems. Though these reforms are necessary. The question is whether they are sufficient and timely. Recent performance suggests caution. As at Q3 2025, only 61 percent of revenue targets had been achieved. Capital releases lagged sharply, and comprehensive implementation reports have not been published. Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., expressed doubts about the credibility of the projections, citing weak performance in 2024 and 2025. “We don’t even know how many budgets we are implementing now,” Olubunmi observed, pointing to overlapping cycles and missing reports. The ADC goes further, describing revenue projections as detached from reality, while noting that revenue growth in 2024 was largely driven by currency devaluation, not structural expansion, before being doubled for 2025 and increased again for 2026. Nominal gains, it argues, are being mistaken for real fiscal strength. Without deep structural reforms, reliable power, export diversification, and productivity growth, revenue expansion risks remaining inflationary and fragile, unable to support the scale of spending proposed.
Budget Execution and the Credibility Gap
President Tinubu has declared 2026 a turning point. He promised an end to overlapping budgets, abandoned projects, and perpetual rollovers. All prior capital liabilities, he said, will be closed by March 31, 2026, ushering in a single budget cycle. Yet Nigeria’s execution record invites skepticism. The Coalition of United Opposition Political Parties (CUPP) points out that no comprehensive 2025 budget implementation report has been published, the first such lapse in 15 years. Quarterly performance reports, once routine, have been withheld, violating fiscal responsibility norms. “How can a new budget be proposed when the performance of the current one remains unknown?” CUPP asked. Execution failure is not cosmetic; it is costly. Projects stall, costs balloon, and borrowed funds yield no returns. Without transparency and enforcement, discipline risks becoming a slogan rather than a system.
Capital Spending vs the Persistent Cost of Governance
The N26.08 trillion allocated to capital expenditure is one of the budget’s most advertised strengths, with infrastructure, agriculture, education, and health featuring prominently. Yet Nigeria’s history cautions against equating allocations with outcomes. Recurrent non-debt expenditure remains high at N15.25 trillion, reflecting a governance structure that consumes significant resources. Ministries, departments, agencies, and political overheads continue to limit fiscal space. Mr. Idakolo Gbolade of SD&D Capital Management acknowledges the budget’s ambition but warns that over 70 percent of capital expenditure may be carried over into 2026. This suggests that implementation bottlenecks remain unresolved. Borrowing to fund capital projects that are delayed or abandoned compounds fiscal inefficiency. Nigeria risks paying interest on infrastructure that exists only on paper. Until the cost of governance is structurally reduced, capital spending will struggle to deliver transformative impact, regardless of headline figures.
Security Spending at Scale, But Lacking Clarity
Security receives the largest sectoral allocation, N5.41 trillion, alongside a new national counterterrorism doctrine targeting all armed non-state actors. The administration argues, correctly, that without security, investment cannot thrive. On the contrary, Nigeria’s experience shows that security spending does not automatically translate into security outcomes. Over the years, allocations have risen while insecurity persists across multiple regions. The challenge is not merely funding, but accountability, coordination, and effectiveness. Without transparency in procurement and deployment, security budgets risk becoming opaque sinks for public funds, undermining the very growth assumptions embedded in the budget.
Shared Prosperity Under Pressure
Though the budget promises shared prosperity, citing allocations of N3.52 trillion for education and N2.48 trillion for health, alongside agricultural and infrastructure investments, and with the National Bureau of Statistics announcement that inflation has moderated, and growth has improved modestly. Yet for ordinary Nigerians, relief remains elusive. Food prices are high, transport costs elevated, and real incomes squeezed. Social sector spending still struggles to keep pace with population growth. Shared prosperity cannot remain an aspiration deferred to the future. It must translate into jobs, affordable food, functioning schools, accessible healthcare, and rising real incomes.
Borrowing Without Beneficiaries
At the 2025 IMF and World Bank Annual Meetings in Washington, D.C., global leaders again pledged to address developing countries’ debt burdens. But as Nigeria continues to issue Eurobonds, sukuk, and bilateral loans, a simple question demands attention: who benefits from all this borrowing? If the answer is not citizens, businesses, and future generations, then the debt is not development finance; it is deferred hardship.
When Deficits Become Destiny
The 2026 budget reflects an administration aware of Nigeria’s fiscal dysfunctions and eager to correct them. The language of discipline, digitisation, and delivery signals intent. But credibility is not declared; it is earned. A deficit-driven budget that leans heavily on borrowing, struggles with revenue realism, and carries unresolved execution gaps places Nigeria on a narrow fiscal path. If borrowing is decisively tied to self-liquidating projects, transparency restored, and governance costs reduced, the budget could mark a turning point. If not, it risks confirming a grim truth as Nigeria is financing today by mortgaging tomorrow. Until debt stops crowding out development and revenue begins to fund governance rather than merely service it, deficits will no longer be temporary tools. They will become destiny.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
Kayode Egbetokun, inspector-general of Police (IGP), has declared Nigeria’s banking industry a strategic national asset, ordering an immediate intelligence-led crackdown on cybercriminal networks, insider facilitators, and transnational financial crime syndicates threatening the stability of the financial system.
Kayode Egbetokun, inspector-general of Police (IGP),
Speaking at a strategic meeting with the Chartered Institute of Bankers of Nigeria (CIBN) and the Body of Bank Chief Executive Officers in Lagos, where he said the Nigeria Police Force was shifting from reactive policing to proactive dismantling of organised criminal structures targeting banks.
According to him, the financial sector remains central to national stability.
He said: “The Nigerian banking industry is not merely a driver of economic activity; it is a core component of our national stability architecture. The integrity, continuity, and resilience of the financial system are directly linked to public confidence, investor perception, and the credibility of Nigeria’s economic governance.”
In a major policy shift, Egbetokun announced that regular police officers would no longer be deployed for routine cash-in-transit escorts or non-essential VIP protective duties within the private sector.
He explained that the decision aligned with national policy direction and manpower optimisation within the Force, adding that the traditional model of conventional police deployment for banking sector protection was being reviewed and progressively restructured.
“This policy adjustment is not designed to diminish the security framework supporting the banking industry. Rather, it reflects a deliberate transition towards a more sustainable, professional, and institutionally governed model of security support,” he said.
Egbetokun warned that conventional risks such as armed robbery and cash-in-transit vulnerabilities, though still present, have been overtaken by more complex and technologically sophisticated threats.
“These threats are adaptive, technologically sophisticated, and often coordinated across borders. They include cyber-enabled fraud, identity compromise, insider facilitation, organised financial crime, and illicit financial flows,” he told the bankers.
The IGP stressed that disruptions to banking operations now carry international reputational consequences, citing global compliance standards set by the Financial Action Task Force FATF and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) obligations.
He said: “In an era shaped by FATF standards, AML/CFT obligations, and heightened scrutiny of financial flows, the strength of a nation’s enforcement and security architecture is now directly relevant to investor confidence and market stability.”
The police noted that: “The speed and sophistication of cyber-enabled fraud illustrate the urgency of integration. Delayed reporting windows can render enforcement ineffective, while rapid escalation, evidence preservation, and coordinated response can significantly improve disruption, recovery, and prosecution outcomes.
“Modern financial crime operates at a pace that requires equally modern security coordination.”
Egbetokun disclosed that the Force had already intensified covert operations targeting kidnapping syndicates, illegal arms networks, and organised criminal enterprises whose activities threaten commercial stability.
He added that the Police were strengthening coordination with the Economic and Financial Crimes Commission (EFCC), the Nigeria Financial Intelligence Unit (NFIU), and the Central Bank of Nigeria (CBN) to ensure that criminal enterprises do not exploit gaps between enforcement, compliance, and oversight.
The IGP told the bankers that sustainable security cannot be achieved through episodic contact or fragmented interventions, calling for structured cooperation between law enforcement and financial institutions.
“Security is not merely the absence of crime; it is the presence of stability that enables productivity, investment, and growth. A secure banking environment supports savings mobilisation, credit expansion, financial inclusion, and the confidence of both domestic and international investors.
“When citizens trust financial institutions, participation in the formal economy increases. When investors perceive a stable internal security environment supported by credible enforcement, Nigeria becomes more bankable, more investable, and more competitive.
“The outcome of this meeting should not be limited to dialogue. It should produce structured liaison mechanisms between law enforcement and the banking sector, clear operational protocols for high-risk areas, joint capacity building, and lawful information-sharing.
“The Nigeria Police Force stands ready to work with the banking sector not merely as an enforcement institution, but as a strategic partner in safeguarding the integrity, stability, and international credibility of Nigeria’s financial architecture,” he said.
Earlier in his remarks, Oliver Alawuba, chairman of the Body of Bank Chief Executive Officers, who acknowledged the Police boss for measures put in place to tackle insecurity in the country, highlighted the banking industry’s past support.
He said: “The Bankers’ Committee was responsible for the renovation of over 42 police stations that were destroyed during the EndSARS protests. We stepped in when police infrastructure was in ruins. Today, we expect that same urgency when our own infrastructure is under digital siege.”
Professor Pius Olarenwaju, president, CIBN, on his part, painted a grim picture of an industry under silent assault, warning that the velocity of cyberattacks now outstrips the response capacity of traditional law enforcement.
“The banking sector plays a pivotal role in Nigeria’s economic development, and our critical functions can only flourish in a secure and stable environment. But we are fighting a war where the enemy no longer carries guns , they carry laptops and exploit system vulnerabilities in milliseconds,” he told the IGP.
Olarenwaju further stressed that the rapid digital transformation of financial services has created a security paradox.
“As we deepen financial inclusion and expand digital channels, we also expand the attack surface for cybercriminals. The same technology that empowers the unbanked also empowers fraudsters operating from jurisdictions where Nigerian law enforcement has no reach. This is the new reality, and we need the police to evolve with it,” he said.
Present at the occasion were Managing Directors and Chief Executive Officers of banks such as Union Bank, Signature Bank, Parallex Bank, Standard Chartered Bank, Keystone Bank, Coronation Merchant Bank, Guaranty Trust Bank, United Bank for Africa, among others.
E-Financial
Rashidat Adebisi Unveils Strategic Roadmap for Nigeria’s Insurance Sector under NIIRA 2025
Following a landmark 21-year career in institutional finance, Rashidat Adebisi, the former Executive Director at AXA Mansard, has officially launched “The Re-Architecture Project.”
This strategic pivot aims to align Nigeria’s insurance and financial infrastructure with the federal government’s ambitious $1 trillion economy goal, positioning the sector as a critical driver of macro-economic stability.
As Nigeria navigates the complexities of the Nigeria Insurance Industry Reform Act (NIIRA 2025), Adebisi identifies this moment as a “watershed” for the industry.
She argues that the path to a trillion-dollar economy requires more than just capital, it demands a total re-architecture of how financial systems interact with the informal economy, which currently accounts for over 60% of employment in Africa.
Macro-Economic Resilience as a National Imperative
The Re-Architecture Project reframes insurance from a transactional product into the “secret sauce” of a resilient economy.
Adebisi asserts that for Nigeria to achieve its macro-economic targets, the insurance industry must bridge the massive “protection gap,” as penetration currently remains below 3% across many African markets.
Insurance as an Economic Safety Net: “Insurance is the net that allows a nation to jump higher,” Adebisi stated.
She emphasizes that every decimal point in a financial model represents a business stabilized and a future secured, providing the essential foundation for macro-economic growth.
Infrastructure Beyond Capital: The project posits that Nigeria is not lacking capital but “invisible infrastructure”, specifically Trust, Access, and Regulatory Clarity.
NIIRA 2025: From Compliance to Competitive Advantage
Adebisi describes NIIRA 2025 as a vital structural reinforcement rather than regulatory friction. The Act’s focus on Capital Recalibration, Stronger Governance, and Consumer Protection is essential for building the institutional rigour required to support a $1 trillion GDP.
Recalibrating Foundations: The reform represents a necessary recalibration of the industry’s foundations while accelerating digital transformation.
Strategic Policy Fluency: “Those who view compliance as a burden will struggle; those who see it as a competitive advantage will thrive,” Adebisi noted, identifying policy fluency as a core leadership competency for the next decade.
Economic Visibility: Integrating the Informal Sector
A central pillar of the project is “Engineering Inclusive Ecosystems,” exemplified by the FileAm App. This initiative reimagines tax compliance as a digital utility for SMEs and informal entrepreneurs, moving them from economic invisibility into formal digital tax rails, insurance coverage, and credit ecosystems.
The Wealth Pipeline: By building digital identity and verifiable credentials, the project aims to turn compliance into credit history, and credit history into the capital access required for intergenerational wealth creation.
As a Financial Systems Architect, Adebisi’s blueprint for the next decade is governed by a singular core rule: Data-aware. Policy-conscious. Africa-focused.. The project calls on industry leaders and policymakers to move beyond incremental adoption toward designing interoperable ecosystems that can sustain the Africa of tomorrow.
“The future of finance in Africa will not be inherited. It will be architected,” Adebisi concluded. “It is our turn to build.”.
The National Insurance Commission (NAICOM) has unveiled a far-reaching reform agenda aimed at strengthening industry stability, improving consumer confidence, and positioning the sector to play more strategic role in national economic growth.
Speaking at the 2026 management retreat in Uyo, Olusegun Ayo Omosehin, commissioner for Insurance/CEO, NAICOM, described the initiative as a defining moment for the industry, stressing that the transformation drive is designed to modernise regulatory oversight, deepen market penetration, and build a more resilient and globally competitive insurance industry.
The renewed policy direction was unveiled at the Commission’s 2026 Management Retreat held in Uyo, Akwa Ibom State, under the theme “Insurance Regulation: Reset, Reimagine, Refocus.”
Omosehin, described the retreat as a watershed moment in the Commission’s 29-year evolution, declaring that the regulator is embarking on a decisive transformation phase anchored on integrity, professionalism, accountability, and institutional unity.
He stressed that the reform agenda represents a deliberate shift away from outdated regulatory practices towards a modern, proactive, and impact-driven supervisory framework capable of strengthening market confidence and driving sustainable industry growth.
Omosehin explained that the retreat’s theme reflects a strategic call to action designed to reset legacy regulatory approaches, reimagine the untapped potential of Nigeria’s insurance market, and refocus regulatory strategies to deliver measurable economic value.
He further underscored the Commission’s strategic role in supporting the economic expansion blueprint of president Bola Ahmed Tinubu, noting that achieving Nigeria’s ambitious $1 trillion economic target requires a resilient, well-capitalized, and shock-resistant insurance sector capable of underwriting major risks, attracting investment inflows, and supporting long-term national development.
Central to the reform drive is NAICOM’s ongoing recapitalization programme, which the commissioner described as one of the most far-reaching regulatory interventions in the history of Nigeria’s insurance industry.
He clarified that the initiative goes far beyond capital injection, stressing that it is designed to strengthen insurers’ financial stability, enhance consumer protection, deepen insurance penetration across underserved segments, reinforce the industry’s capacity to withstand economic shocks, and rebuild public trust in insurance as a credible financial safety net.
He emphasized that the credibility of the exercise will be measured by its transparency, fairness, and professional execution, warning that the Commission will tolerate no ambiguity, compromise, or preferential treatment in the process.
Addressing management staff, Omosehin delivered a firm directive for internal discipline and cohesion, urging leaders within the Commission to uphold integrity as a guiding principle, professionalism as an operational compass, and transparency as a non-negotiable regulatory standard.
He stressed that NAICOM’s effectiveness depends on institutional collaboration, warning that departmental silos and bureaucratic rivalries undermine regulatory efficiency.
In a symbolic demonstration of commitment, management staff collectively pledged to uphold fairness, accountability, and global best practices in executing the recapitalization roadmap and safeguarding the future of the insurance sector.
The Commissioner also outlined key strategic priorities expected to reposition the industry, including strengthening regulatory oversight, ensuring disciplined execution of the recapitalization framework, deepening stakeholder engagement, expanding institutional capacity in risk-based supervision and data analytics, driving market development through digital innovation, strengthening organizational culture, and reinforcing policyholder protection mechanisms.
Omosehin also invoked an African proverb to emphasize the importance of unity and collective resolve, noting that sustainable transformation of the insurance sector can only be achieved through shared commitment among regulators, operators, and stakeholders.
He reaffirmed NAICOM’s determination to build an insurance industry that is resilient, globally competitive, trusted by policyholders, and fully aligned with Nigeria’s long-term economic transformation agenda.
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