President Tinubu to borrow 40% of the money needed to run Nigeria in 2026

By The Neighbourhood Economic Team

On Friday, December 19, 2025, President Bola Tinubu presented a N58.18 trillion budget for the 2026 fiscal year. To put it simply: the government is planning a “hard reset.”

Think of this budget as a homeowner who is deeply in debt but decides to take out one last big loan to finally fix the roof, the gate, and the generator, hoping that these repairs will finally help the family earn more money.

Here is a simplified, analytical look at the “Budget of Consolidation and Resilience.”

1. The big numbers (The family wallet)
The government expects to earn N34.33 trillion but plans to spend N58.18 trillion.

The gap (deficit): There is a N23.85 trillion hole.

The Solution: The government plans to fill this hole by borrowing. In fact, over 40% of the money needed to run Nigeria in 2026 will be borrowed money.

2. Where is the money going? (sector isolation)

If you had N100 to spend based on this budget, here is how you would be splitting it:

Sector allocation (Naira) % of Budget – What it means for you

Debt Servicing N15.52 Trillion 26.67% Nearly N27 of every N100 goes to paying back interest on old loans.

Security N5.41 trillion(9.30%) The “big stick” approach. More money for tech and troops to fight banditry.

Infrastructure N3.56 trillion(6.12%) – Road and rail projects. The goal is to make moving goods cheaper.

Education N3.52 trillion(6.05%) – Heavily focused on the Student Loan Fund (NELFUND) and repairs.

Health N2.48 trillion(4.26%) – Focusing on primary healthcare and keeping doctors from leaving.

3. The “relatable” analysis: 3 things to watch

A. The “terrorist” tag and your safety

The President made a bold move by officially classifying all “non-state armed groups” as terrorists. This isn’t just a name change; it allows the military to use N5.41 trillion to go “all out” without the legal red tape usually involved in policing. If successful, this could finally lower the cost of food by making farms safe again.

B. The end of “forever projects”

For years, Nigeria had projects that appeared in the budget for 10 years and never got completed. Tinubu has ordered a March 2026 “cutoff.” If a project isn’t compleed or properly accounted for by then, the tap gets turned off. This is a push for discipline over sentiment.

C. The exchange rate gamble

The budget is built on an exchange rate of N1,400 to $1.

The risk: If the Naira falls significantly further than this (e.g., to N1,700), the budget “breaks.” The N58 trillion won’t buy as much as planned, and the debt service costs will skyrocket because much of our debt is in Dollars.

4. Final verdict

The 2026 budget is ambitious but fragile. It relies on the hope that security will improve enough for us to pump 1.84 million barrels of oil per day. If the oil flows and the borrowing is managed, the “consolidation” might work. If not, the debt burden could become a “resilience” test that the average Nigerian’s pocket might struggle to pass.