Senate Defends ₦25.91 Trillion 2026 Deficit, Calls for End to Electricity Subsidy

The Nigerian Senate has defended the projected ₦25.91 trillion deficit in the 2026 Appropriation Bill, saying borrowing is necessary to fund the federal budget and urging the removal of electricity subsidies to free resources for priority spending.

Senator Solomon Adeola, Chairman of the Senate Appropriations Committee, told lawmakers and stakeholders that the country could not realistically meet its infrastructure, security, and social obligations without deficit financing. He emphasized that the challenge is not borrowing itself, but ensuring that borrowed funds are raised responsibly and used efficiently. The Senate indicated that the government would limit domestic borrowing to avoid crowding out private sector credit, while exploring external loans, asset sales, privatization, and public-private partnerships (PPPs) to finance the gap. On electricity subsidies, lawmakers described them as a significant drain on public finances, calling for their complete removal. The Senate stressed that freeing these resources would allow more funding for development projects and social interventions, while urging states to share the cost of electricity affordability measures instead of relying solely on the federal budget. The Senate also declared an end to automatic budget extensions, insisting that all budgetary allocations must be implemented within the fiscal year. Lawmakers warned government agencies to justify their spending proposals or face reallocations, emphasizing that fiscal discipline and accountability are critical for effective budgeting. Economic analysts have noted that Nigeria faces growing debt pressures, with revenue projected at ₦33.19 trillion against planned spending of ₦58.47 trillion, and debt servicing expected to consume a significant portion of government income. They called on the government to strengthen revenue mobilization and ensure strict compliance with fiscal rules.