The House of Representatives on Thursday approved the 2026–2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), sustaining the federal government’s crude oil benchmark at $64.85 per barrel for 2026.

This contrasts with the Senate, which had reduced the oil price benchmark to $60 per barrel, creating a divergence between the two chambers ahead of the 2026 budget.

The House Committee on Finance and National Planning had initially proposed lowering the 2026 oil price to $60 per barrel to shield government revenue from global oil price volatility during the peak season.

The committee argued that cutting the benchmark would protect government revenue from market fluctuations and geopolitical tensions in Europe and the Middle East. However, this recommendation was opposed by several members, eventually forcing the House to suspend consideration of the budget documents.

Tajudeen Abbas, Speaker of the Hosue warned that lowering the benchmark without fully modelling the impact on revenue, borrowing, and total government expenditure could create shortfalls that would need to be covered through higher domestic revenue mobilisation or increased borrowing.

However, during Thursday’s plenary session, the House decided to revert to the Executive’s original figures of $64.85 per barrel for 2026, $64.30 for 2027, and $65.50 for 2028. Meanwhile, the Senate had cut the 2026 benchmark to $60 per barrel, while keeping the 2027 and 2028 projections slightly higher at $65 and $70 respectively, arguing that the move would shield the economy from global price shocks and ensure more conservative revenue projections.

Both chambers, however, sustained other macroeconomic parameters. The House maintained the projection for domestic crude oil production at 1.84 mbpd, 1.88 mbpd, and 1.92 mbpd for 2026, 2027, and 2028, respectively.

The projected exchange rates for 2026, 2027, and 2028 are N1,512, N1,432.15, and N1,383.18, respectively, while inflation rate projections for the same years are 16.5%, 13%, and 9%, respectively.

The House also sustained the GDP growth rate projections at 4.68%, 5.96%, and 7.9% for 2026, 2027, and 2028, respectively. The real GDP growth rate projections remain the same for the three years.

Proposed spending was maintained at N54.46 trillion, of which N34.33 trillion is FGN retained revenue. New borrowings are projected at N17.88 trillion, comprising both domestic and foreign borrowings. Debt service is valued at N15.52 trillion, while pensions, gratuities, and retirees’ benefits stand at N1.376 trillion. The fiscal deficit is projected at N20.13 trillion.

Capital expenditure is projected at N20.131 trillion, exclusive of transfers. Statutory transfers stand at N3.152 trillion, while the sinking fund is projected at N388.54 billion. Total recurrent (non-debt) expenditure is projected at N15.265 trillion, with special interventions for recurrent and capital pegged at N200 billion and N14 billion, respectively. (BusinessDay)