Nigeria’s federal government recorded a fiscal deficit of N4.69 trillion in the first quarter of 2026, falling short of the prorated target of N7.86 trillion, according to the Budget Office of the Federation (BOF). The shortfall was driven by a sharp drop in revenue collection, which stood at N5.08 trillion against a quarterly target of N9.22 trillion.
Government spending also lagged behind expectations, with total expenditure of N9.76 trillion versus the projected N17.08 trillion. The deficit was financed mainly through domestic borrowing of N3.9 trillion, slightly below the target of N4.61 trillion, while no foreign borrowing materialised against a planned N2.70 trillion inflow.
Despite the fiscal squeeze, Nigeria’s economy grew 3.89 % in real terms during the quarter. The oil sector expanded by 2.57 % year‑on‑year, up 0.70 percentage points from the same period in 2025, while the non‑oil sector grew 3.94 %, contributing a larger share of the overall expansion.
The BOF highlighted that weak, though improving, revenue performance remains a key constraint to budget execution. “Improving revenue collections in the subsequent quarters of the year is critical to the successful execution of the 2026 Budget,” the report said.
To strengthen the economy, the Budget Office identified priorities such as oil production recovery, tax‑base expansion, improved tax compliance, increased domestic production, agricultural productivity, infrastructure development, private‑sector credit and export diversification. “The central policy challenge for the remainder of 2026 is therefore not simply to preserve stability, but to convert stability into higher productive capacity and stronger domestic revenue mobilisation,” it added.
Reaffirming its commitment to transparency and accountability, the BOF pledged to adhere to budget implementation guidelines, improve execution efficiency and ensure effective project management in the remaining quarters of 2026, while also controlling recurrent expenditure, particularly personnel costs, and addressing security challenges to enhance fiscal performance.
<small>Source: Vanguard News — read the original story there.</small>
