The Federal Government has announced plans to transfer outstanding projects and expenditure commitments under the 2026 budget into the 2027 fiscal year as part of measures to end the practice of implementing multiple national budgets simultaneously.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday in Abuja during the launch of the October 2026 edition of the World Bank’s Nigeria Development Update.

The Senate and House of Representatives earlier approved the extension of the implementation of the capital component of the 2025 budget to December 31, 2026, giving Ministries, Departments and Agencies additional time to execute capital projects captured in the 2025 Appropriation Act. It is the fourth extension of the budget’s capital implementation period.

Oyedele acknowledged weaknesses in the country’s budget preparation and implementation processes, particularly unrealistic revenue projections and the repeated extension of capital budgets beyond their original fiscal years.

He said the government was working with the Ministry of Budget and Economic Planning and the Budget Office of the Federation to introduce a more realistic budgeting framework from 2027.

“Whatever is left of 2026, we’re transferring into 2027, not running two budgets,” the minister said. “We acknowledge that we can do budget better. We shouldn’t be running multiple budgets at the same time. We shouldn’t have projections for revenue where the outcome is 40 per cent or 60 per cent. We acknowledge that.”

The minister explained that the reforms would address the accumulation of outstanding expenditure commitments across successive fiscal years, which has complicated budget implementation and weakened the credibility of government spending plans.

He noted that the 2025 capital budget had already been extended to December 2026, while legislative measures were expected to facilitate the clearance of outstanding obligations under previous budgets.

According to him, the government intends to resolve the remaining 2024 budget commitments and address outstanding expenditure under the 2025 and 2026 budgets before adopting a more streamlined approach.

Oyedele said future revenue and expenditure projections would be based on actual fiscal performance rather than assumptions carried forward from previous budgets.

The minister assured Nigerians that the changes would become evident in the preparation and implementation of the 2027 budget. “What I’m saying to the Nigerian people is that you will see the difference from next year,” he stated.

On the timeline for presenting the 2027 Appropriation Bill to the National Assembly, Oyedele said the government intended to submit the proposal before the commencement of the new fiscal year but could not guarantee the legislative timetable.

Beyond budget reforms, Oyedele said the government’s fiscal strategy would prioritise human development, infrastructure and measures to stimulate private investment.

He explained that the administration’s tax reforms were designed to expand economic activity and increase the number of productive taxpayers rather than impose additional taxes on existing businesses and households. “We need more and bigger taxpayers, not more new or higher taxes,” he said.

The minister argued that stronger economic growth would improve government revenue while creating opportunities for employment and higher incomes.

He also maintained that Nigeria’s economic reforms had strengthened macroeconomic stability, although their benefits had yet to translate fully into improvements in household welfare. “Economic stability is not the destination for us. It’s the foundation,” he said.

He expressed confidence that Nigeria’s economic growth would exceed the World Bank’s revised projection of 4.3 per cent in 2026, while stressing the importance of creating better-paying jobs.

Oyedele added that the Federal Government would strengthen coordination with states and monetary authorities to address inflation and improve public service delivery.

Earlier, the World Bank Country Director for Nigeria, Mathew Verghis, called for stronger budget credibility, public investment management and expenditure controls across the federation.

Verghis said Nigeria’s macroeconomic reforms had substantially increased revenues available to the federal and state governments, but improved fiscal resources must translate into better development outcomes.

“Priorities in this regard will include strengthening budget credibility, improving cash and commitment controls, strengthening public investment management,” he said.

He explained that state governments had benefited significantly from increased federation transfers following the removal of petrol subsidies, foreign exchange reforms and improvements in tax administration.

However, he observed that higher revenues had not produced proportionate improvements across all sectors. According to him, most states had increased spending on transport infrastructure and reduced domestic debt, while expenditure on education, healthcare and social protection had grown more slowly.

Vergaid nearly all states now published annual budgets, quarterly implementation reports, audited financial statements and debt information, representing progress in fiscal transparency.

The World Bank official urged governments to build on these improvements by strengthening expenditure controls and ensuring that budget allocations delivered measurable benefits.

Presenting the report, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, said significant discrepancies remained between budgeted and actual capital expenditure across states.

He identified weak budget credibility, inadequate cash management and shortcomings in public investment planning as major challenges affecting fiscal outcomes.

Haile said the country’s consolidated fiscal position improved during the first half of 2026, supported by increased revenues and stronger federation transfers. According to him, the Federal Government’s fiscal deficit declined from five per cent of GDP in the corresponding period of 2025 to four per cent in the first half of 2026.

He added that the aggregate fiscal surplus recorded by states increased from 0.7 per cent to 0.9 per cent of GDP. The economist said gross federation revenues rose by 69 per cent between 2023 and 2025, while net distributed revenues increased by approximately 60 per cent.

However, he warned that spending pressures could intensify in the second half of 2026 because of accelerated project implementation, development expenditure and election-related activities.

“Nigeria’s consolidated fiscal position, including both the federal government but also aggregate state fiscal position, has strengthened in the first half of 2026, but spending pressures, I expect, will pick up in the second half due to faster execution of projects, but also election and development-related spending,” he said.

Haile recommended more credible budgets, stronger financial management systems and improved coordination between federal and state governments. He also urged states to broaden their internally generated revenue bases and reduce dependence on federation allocations.

Speaking during the panel discussion, the Deputy Governor of the Central Bank of Nigeria in charge of Financial System Stability, Lamido Yuguda, said fiscal and monetary authorities must work together to sustain economic stability.

Yuguda explained that inflation remained a major challenge despite improvements in monetary conditions and the foreign exchange market. He said the CBN would continue to base monetary policy decisions on economic data, liquidity conditions and developments in international financial markets.

“We are data-dependent,” he said, adding that monetary authorities would maintain the necessary discipline to bring inflation towards single digits.

The deputy governor noted that stronger foreign exchange reserves and improved market liquidity had enhanced confidence in Nigeria’s economy. He nevertheless stressed that structural problems affecting food production, security and infrastructure required government intervention beyond monetary policy.

Also speaking, Katsina State Governor, Dikko Radda, said increased government revenues should be directed towards projects that reduce the cost of living and improve access to essential services.

Radda argued that infrastructure and social investments should complement one another rather than compete for limited public resources. The governor said his administration had prioritised education, healthcare, energy and infrastructure, including the construction of about 170 schools and the development of 268 functional primary healthcare facilities.

He disclosed that the state had paid more than N50bn in outstanding gratuities over two years and introduced reforms to improve revenue collection. Radda said technology, the Treasury Single Account and digital land administration had strengthened the state’s internally generated revenue.

According to him, the objective was to reduce dependence on federal allocations while maintaining spending on essential services and capital projects.

The Chief Executive Officer of the Nigerian Economic Summit Group, Tayo Aduloju, said Nigeria needed to move beyond macroeconomic stabilisation towards reforms that would translate improved government finances into jobs, productivity and higher household incomes.

Aduloju acknowledged the progress recorded through economic reforms but argued that stronger coordination between fiscal policy, monetary policy and private investment was necessary.

He said public infrastructure spending should focus on projects that connect production centres to markets, improve logistics and attract private capital. The NESG chief also warned that government budgets alone could not finance Nigeria’s enormous infrastructure requirements.

“Nigeria needs at scale $2.3tn to upgrade its national and subnational infrastructure to world-class,” he said.

He urged governments to develop commercially viable projects capable of attracting private investment rather than relying exclusively on budgetary allocations.

Aduloju further estimated that Nigeria would need to create about four million jobs annually between now and 2030 to achieve substantial poverty reduction. “Are we creating jobs? Yes. Are we creating the jobs required to lift more people out of poverty at scale? No, not yet,” he said.

He identified high borrowing costs, insecurity, expensive energy and inadequate transport infrastructure as obstacles to private sector expansion.

The NESG chief called for greater policy consistency and collaboration among governments, financial institutions and businesses to ensure that increased public revenues translate into productive investments.