Civic technology organisation BudgIT has warned that Nigeria’s projected fiscal deficit under the 2026 budget exceeds the limit allowed by the Fiscal Responsibility Act, raising concerns over the country’s fiscal sustainability.

In its analysis of the 2026 Appropriation Act, the organisation said the Federal Government projected revenue of N36.87 trillion against total expenditure of N68.32 trillion, leaving a financing gap of N31.45 trillion, equivalent to 6.41 per cent of Nigeria’s Gross Domestic Product.

BudgIT said the projected deficit is more than double the three per cent ceiling prescribed by the Fiscal Responsibility Act, warning that the gap could increase the country’s debt burden if revenue targets are not achieved.

The report noted that projected revenue would fund only about 53.9 per cent of planned spending, leaving the government to rely heavily on borrowing to finance the remaining expenditure.

Questioning the credibility of the government’s revenue projections, BudgIT pointed to previous years when actual revenue fell short of budget estimates. It cited official figures showing that by the middle of 2025, only N10.92 trillion had been generated out of a projected N36.35 trillion.

The organisation also expressed concern over rising poverty, noting that the number of Nigerians living in poverty increased from 40 million in 2019 to 56 million in 2023, with rural communities accounting for a large share of those affected.

BudgIT urged the Federal Government to prioritise investments that boost economic productivity, strengthen social protection programmes and create a more supportive environment for small and medium-sized enterprises.

The report further criticised funding for the health and education sectors, saying both received allocations below international benchmarks. According to BudgIT, health was allocated about five per cent of the national budget, while education accounted for roughly four per cent of total spending.

Although the organisation acknowledged improvements in some macroeconomic indicators, including the rise in Nigeria’s foreign exchange reserves to $45.5 billion by the end of 2025, it warned that the gains were driven mainly by short-term portfolio investments rather than long-term productive capital needed to sustain economic growth.