FG Directs MDAs to Carry Over 70% of 2025 Capital Budget into 2026

The Federal Government has instructed ministries, departments and agencies (MDAs) to roll over 70% of their 2025 capital budget into the 2026 fiscal year. 

This move is aimed at ensuring ongoing projects are completed, especially as the government faces revenue constraints and mounting fiscal pressures.

The directive is contained in the 2026 Abridged Budget Call Circular issued by the Ministry of Budget and Economic Planning and sent to ministers, service chiefs and heads of agencies. The circular also bars MDAs from introducing new capital projects in their 2026 budget proposals.

Under the new guidelines, MDAs are required to upload 70% of their 2025 FGN capital budget to continue in 2026. The rollover projects must align with key government priorities, including national security, economic growth, education, health, agriculture, infrastructure, power, energy and social safety nets.

New cap on 2026 capital proposals

The circular explains that the government has adopted a framework that caps 2026 capital budget ceilings at 70% of 2025 allocations. In practical terms, the government plans to release only 30% of the 2025 capital budget in 2025, while the remaining 70% will form the base of 2026 capital spending.

According to the ministry, this policy is designed to avoid duplication, promote continuity and prevent abandoned projects.

Warning on overhead costs

The government also cautioned MDAs against exceeding their 2025 overhead ceilings in 2026 proposals, even with inflation concerns.

The circular said revenue limitations remain a major constraint and warned that any submissions exceeding approved limits will be reduced.

2026 budget must align with national plans

The ministry noted that the 2026 budget should reflect major national frameworks including:

• The Medium-Term Expenditure Framework (2026–2028)
  
• The Renewed Hope Infrastructure Development Plan
  
• The Ward Development Plan
  
• The National Development Plan
  
• The Accelerated Stabilisation and Actualisation Plan
  

MDAs are to submit their budgets through the GIFMIS Budget Preparation Subsystem, while government-owned enterprises will submit using the Budget Information Management and Monitoring System.

Tight revenue outlook, higher debt service

The fiscal projections attached to the circular suggest continued pressure on government finances in 2026.

Key highlights include:

• Total funds available to the Federal Government (including GOEs) projected at N54.46tn, slightly lower than N54.99tn in 2025.
  
• Statutory transfers expected to decline to N3.15tn from N3.64tn in 2025.
  
• Recurrent non-debt spending estimated at N15.26tn.
  
• Debt service projected to rise to N15.52tn from N13.94tn in 2025.
  

Capital spending is also expected to tighten:

• Aggregate capital expenditure projected at N22.37tn, down from N26.19tn in 2025.
  
• MDA capital allocations expected to drop from N12.39tn to N8.67tn.
  
• Project-tied loans projected to decline from N3.36tn to N2.05tn.

Meanwhile, the fiscal deficit is projected to widen to N20.12tn in 2026, up from N14.10tn in 2025.