Understanding Nigeria's New Economic Policy Framework

What should we think about the new draft economic framework? First, let’s ask this: Can Nigeria create a reliable long-term economic policy if its budget practices do not support the discipline, predictability, and accountability that this framework aims to establish? It is easier to evaluate the framework by looking at how well it closes the gap between what our government says it wants to achieve economically and its real ability to carry out these plans.

When my friend got a copy of the "Nigeria Economic Policy Framework: Public Consultation Document" from the Federal Ministry of Finance, she had questions. She wondered how the document explains why the federal government is “running three annual budgets simultaneously.” She also asked why the 2026, 2028 Medium-Term Expenditure Framework/Fiscal Strategy Paper is not available to the public before the 2027 budget, especially since the Budget Office said the draft was ready in July.

I couldn't answer her questions. I’m sure the federal government sees the irony in this situation. But why does this matter? My friend is a teacher who leads discussions in her classes about these topics. She opens senior management retreats with PowerPoint presentations filled with numbers and graphs from these reports. But what happens next? In local terms, “Who has benefited from this knowledge and how?”

The truth is that these numbers do not help us understand how the government plans to manage the country’s finances. Our leaders know that financial markets expect these documents to be prepared and released because we owe them a lot of money. They want to check off the transparency and accountability boxes. But nothing shows the cynical nature of this box-checking like the Tinubu government’s choice to keep overlapping budgets.

Now, what about the 2026 annual budget? Why should we care? The bigger issue is that when funds from different financial years mix together, it becomes very hard to tell which budget financed which project, how much was spent, and if the original funding met its goals. In simple terms, it is like the captain of the ship trying to steer through rough waters while blindfolded.

Despite the current federal government promising to clear previous capital debts by March 31, 2026, with a single budget cycle starting in April, the capital part of the 2024 budget was carried over into 2025. There is no proof that this part of the 2024 budget is still active. We know that the 2025 budget’s capital spending has been extended four times and is now allowed to continue until the end of the year.

So, why bother with the 2026 annual budget? When funding from different years mixes like this, it is tough to figure out which budget covered which expenses. It raises the question of why this is happening. There are many reasons, from not having enough revenue to delays in spending and other competing financial needs. What is clear is that few things about the Tinubu government raise more concerns about fiscal discipline than this.

What should we think about the new draft economic framework in this situation? First, can Nigeria set up a reliable long-term economic policy if its budget practices are confusing? It is a tricky issue. It is easier to look at how well the framework can connect what the government says it wants to achieve and what it can realistically do.

The main problem here is that the same institutions that create policy and manage budgets are also supposed to ensure they meet their targets. Thankfully, the new economic policy framework suggests we have independent assessments of these measures. For any of this to work, we must figure out the legal powers involved, how to share them, funding, and access to information.

Even with this, the early signs are not encouraging. I might be exaggerating a little. There is nothing wrong with recognizing the lack of solid standards for measuring economic performance as a weakness in Nigeria's economic management. But creating clear rules for how long funds should last and the consequences for not using them in time would be a better way to improve our financial system. Any other ideas? Could we agree on a limit for the fiscal deficit? This limit would clarify how we want to measure the deficit and what actions we will take if we go over it.

Would a debt sustainability framework that includes interest costs, revenue capacity, maturity, and foreign currency be useful? I think so. It would also help to have borrowing rules that clearly state why loans are taken, how they are approved, what information must be disclosed, and how new debts will be paid back. I believe that mandatory reporting on budgets, spending, commitments, actual payments, and project completions is essential for the budget process. We all agree that the medium-term budget ceiling should match realistic revenue expectations.

The main issue is that the same institutions that create policy and manage budgets are also supposed to make sure they meet their targets. Thankfully, the new economic policy framework suggests we have independent assessments of these measures. For any of this to work, we must still sort out the legal powers, how to share them, funding, and access to information needed for effective independent checks.