The presentation of Nigeria’s 2026 Budget marks a pivotal moment in the country’s fiscal management. By openly acknowledging the need for a budget reset, the government has signalled that existing execution frameworks are no longer fit for purpose and require deliberate recalibration. Far from indicating institutional collapse, this acknowledgement reflects a recognition of accumulated structural weaknesses and an attempt to confront them directly. In this sense, the reset represents both a moment of fiscal honesty and a test of governance capacity.
At the core of the current debate is a fundamental disconnect that has long characterised Nigeria’s public finance system: the gap between budget approval and budget execution. Between 2023 and 2025, federal budgets were duly debated, approved by the National Assembly, and signed into law. Yet the implementation of these budgets, particularly on the capital expenditure side, lagged significantly behind expectations. Projects approved during this period experienced delayed releases, stalled execution, or incomplete payment, even where work had been certified. As a result, multiple budget cycles began to overlap, creating a situation where obligations from different fiscal years remained unresolved simultaneously.
This overlap was not merely a technical inconvenience; it produced tangible governance and fiscal distortions. First, it weakened accountability. When projects approved under different budget years are executed concurrently without clear closure, it becomes increasingly difficult to assign responsibility for funding shortfalls, delays, or cost overruns. Second, it complicated treasury management. Nigeria’s fiscal space during this period was constrained by uneven revenue performance and rising debt-service obligations, which absorbed a growing share of available resources. Capital releases, often treated as residual spending after debt service and recurrent costs, were consequently delayed or rationed.
Third, the overlap fuelled public confusion and mistrust. Citizens struggled to reconcile the approval of successive budgets with the visible persistence of unfinished projects across the country.
Against this background, the concept of a budget reset must be understood not as a rhetorical flourish but as a corrective intervention. In public finance practice, a reset typically involves halting the accumulation of unresolved obligations, reconciling existing commitments, and restoring a single, coherent budget framework that can be planned, monitored, and audited effectively. The alternative—continuing to layer new budgets on top of unresolved old ones—would further entrench opacity and inefficiency.
A particularly sensitive aspect of the reset debate concerns unpaid contractors and suppliers whose projects span the 2023–2025 period. Public anxiety has been driven by fears that a reset could be used to abandon or erase existing obligations. In legal and fiscal terms, however, a reset does not automatically cancel valid government debts. Contracts that were properly awarded and whose work has been duly certified remain liabilities of the state. What the reset does introduce is a process of verification and prioritisation. This involves distinguishing between certified arrears, partially completed or disputed claims, and contracts that may have been inflated or improperly procured. While such verification can delay payment, it is also an essential safeguard against abuse in an environment of constrained resources.
The economic and human cost of delayed payments cannot be ignored. Many contractors rely on bank financing to execute government projects, often pledging personal or corporate assets as collateral. Prolonged delays in payment can lead to loan defaults, seizure of property, layoffs, and, in some cases, the collapse of otherwise viable businesses. These effects ripple outward, affecting banks’ balance sheets, employment levels, and overall economic confidence. A credible reset must therefore be accompanied by a transparent and humane arrears management strategy—one that recognises verified obligations, communicates realistic payment timelines, and avoids compounding private-sector distress.
International experience provides useful context.
Budgetary resets, recalibrations, or corrections are not unique to Nigeria.
In the United States, for example, the failure of Congress to pass full-year budgets on time has repeatedly led to the use of continuing resolutions. These temporary funding measures freeze spending at existing levels, halt the initiation of new programmes, and stabilise government operations while negotiations continue.
In the United Kingdom, the aftermath of the global financial crisis prompted a multi-year fiscal recalibration that involved reordering spending priorities, imposing departmental ceilings, and openly acknowledging the unsustainability of previous trajectories.
South Africa routinely employs adjustments budgets and legally defined rollovers to realign spending with revenue realities, particularly when execution deviates from original plans.
The common lesson from these cases is not that fiscal resets are painless or politically popular, but that they are often necessary when planning assumptions diverge sharply from reality.
Crucially, successful resets are underpinned by clear legal frameworks, transparent reporting, and consistent communication. Where these elements are absent, resets risk being perceived as arbitrary or punitive rather than corrective.
For Nigeria, the effectiveness of the 2026 budget reset will hinge on execution discipline and transparency. Publishing a comprehensive arrears register—detailing who is owed, for which projects, at what stage of verification—would provide a factual basis for public understanding and reduce speculation. Ring-fencing arrears within the 2026 budget framework would ensure that outstanding obligations are explicitly acknowledged rather than obscured within general capital allocations. Regular public reporting on releases, payments, and project completion would further strengthen accountability and rebuild trust.
Equally important is the need to address long-standing weaknesses in project selection and prioritisation. Nigeria’s capital budgets have historically been characterised by excessive project proliferation, with limited resources spread thinly across thousands of initiatives. This approach virtually guarantees low completion rates and poor value for money. A reset creates an opportunity to reverse this pattern by prioritising completion over expansion—focusing on fewer, high-impact projects that can be fully funded and delivered. Such discipline is essential not only for fiscal credibility but also for visible development outcomes.
The political context of the reset cannot be ignored. Fiscal corrections are rarely well received, particularly in polarised environments. Opponents may frame a reset as an admission of failure, while supporters may oversimplify it as a technical fix. In reality, it is neither. It is an acknowledgement that governance requires adaptation when evidence shows that existing systems are underperforming. A democratic mandate confers not only authority but responsibility—the responsibility to make difficult adjustments in the national interest, even when they are misunderstood or unpopular.
In conclusion, Nigeria’s 2026 budget reset should be interpreted as a moment of reckoning rather than retreat. It reflects an admission that past execution frameworks have struggled to keep pace with fiscal realities and that continuing along the same path would deepen inefficiency and mistrust. Whether the reset succeeds will depend on how it is implemented: with openness, discipline, and respect for legitimate obligations, or with opacity and discretion that reinforce suspicion. If managed transparently and consistently, the reset can lay the foundation for more credible budgeting, stronger execution, and sustainable development. If not, it risks becoming another missed opportunity in Nigeria’s long struggle to align policy intent with practical delivery.
Princess G. A. Adebajo-Fraser MFR.
President, The National Patriots.
Former Special Adviser, Strategy, Research & Planning to Former President Goodluck Jonathan.
