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The Federal Government has ordered ministries, departments, and agencies to carry over 70 per cent of their 2025 capital budget into the 2026 fiscal year as the administration moves to prioritise the completion of existing projects and contain spending pressures in the face of weak revenues.
This directive is contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning and circulated to all ministers, service chiefs, heads of agencies and top government officials in Abuja.
The circular, which was seen on Monday, stated that the annual budget estimates must follow strict guidelines and that all officers responsible for budget preparation were expected to comply fully. The circular made clear that the preparations for the 2026 budget would not allow the introduction of new capital projects.
It stated that ministries and agencies must continue with the allocations already approved in the 2025 budget rather than seeking fresh projects. The document said MDAs are required to upload 70 per cent of their 2025 budget to continue next year, and that this must be done in line with national priorities.
It explained that the rollover is based on what it described as the immediate needs of the country and the development priorities of the administration. It listed the priorities that align with the policy direction of the government, such as national security, the economy, education, health, agriculture, infrastructure, power and energy, as well as social safety nets, including women and youth empowerment.
According to the circular, “MDAs are to upload 70 per cent of their 2025 FGN Budget to continue in FY2026. All such rollover and uploads MUST be in line with the immediate needs of the country as well as government’s development priorities that aligns with the policy direction of the new administration which hinges on National Security, the Economy, Education, Health, Agriculture, Infrastructure, Power & Energy as well as social safety nets, women & youth empowerment.”
The circular stated that the government had established a framework that sets capital budget ceilings for 2026 at 70 per cent of the 2025 project allocations. It also explained that only 30 per cent of the 2025 capital budget would be released within the current fiscal year, while the remaining 70 per cent would serve as the foundation for the 2026 capital budget, replacing the previous method of a traditional rollover.
It said this would ensure continuity for ongoing projects and eliminate wasteful duplication. The document emphasised that ministries must not attempt to exceed their overhead ceilings from 2025 when preparing their 2026 submissions.
It acknowledged that inflation is affecting costs but said the government is constrained by revenue challenges. It added that the government would sustain the effort to achieve full release of the overhead budget but warned that proposals that go beyond approved ceilings would be adjusted downward.
According to the circular, “MDAs are required to work within and not exceed their 2025 overhead ceilings (Executive Proposal) for the purpose of preparing their 2026 Overhead budget submissions. While we note the impact of inflation on overhead costs, we are, however, constrained by revenue challenges in providing significantly more for overheads. We will, however, sustain the effort to achieve full release of the overhead budget.”
The circular explained that budget estimates must take into consideration the policies and strategies contained in the 2026 to 2028 Medium Term Expenditure Framework and Fiscal Strategy Paper, which it described as the Federal Government’s pre-budget statement.
It said the MTEF outlines development priorities and that the annual budget must be prepared in line with the policy thrust of the administration. It referred to the direction under the Renewed Hope Agenda, including the Renewed Hope Infrastructure Development Plan and Ward Development Plan, the National Development Plan, and other programmes, including the Accelerated Stabilisation and Actualisation Plan.
The circular said all expenditure would be properly scrutinised to allow only essential spending and to ensure value for money. It stated that the government remains committed to improving the efficiency and quality of spending and to strengthening budget formulation, implementation, monitoring, and evaluation.
MDAs were informed that they must submit their budgets online using the GIFMIS Budget Preparation Subsystem, while government-owned enterprises must submit theirs through the Budget Information Management and Monitoring System. Both submissions must be completed not later than Tuesday, December 9, 2025.
The circular warned that it is not the responsibility of budget officers to upload any submission on behalf of any ministry, department, or agency. On personnel costs, the circular stated that the Budget Office had already prepared estimates based on information obtained from the Integrated Personnel and Payroll Information System or submitted earlier by ministries.
It said each ministry would be advised of its personnel cost budget for the 2026 fiscal year. The financial framework accompanying the circular showed a tighter revenue position alongside rising debt service obligations. The amount available for the Federal Government budget, including government-owned enterprises, in 2026 is N54.46tn compared to N54.99tn in 2025.
Statutory transfers are projected at N3.15tn in 2026 compared with N3.64tn for 2025, while recurrent non-debt expenditure is projected at N15.26tn. Debt service increases from N13.94tn in 2025 to N15.52tn in 2026, according to the document. Aggregate capital expenditure is projected at N22.37tn in 2026, down from N26.19tn in the current year.
This is made up of capital supplementation, capital in statutory transfers, special intervention programmes, MDA’s capital expenditure, GOEs capital expenditure, grants, and donor-funded projects and project-tied loans. The amount available for MDA’s capital expenditure falls from N12.39tn in 2025 to N8.67tn in 2026, while the volume of project-tied loans declines sharply from N3.36tn to N2.05tn.
The deficit increases from N14.10tn in the current year to N20.12tn in 2026. Economist and professor at the Olabisi Onabanjo University, Sheriffdeen Tella, earlier faulted the basis of preparing the 2026 budget when implementation of the 2025 budget had barely begun.
Tella questioned how the government arrived at a deficit of N20tn when, according to him, the 2025 budget started late and had not generated any performance indicators to justify new projections.
He said he found the 2026 deficit troubling because “the budget of 2026 is supposed to be premised on the implementation or performance of 2025,” yet “they have just started implementing the 2025 budget… in December 2025.”
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