The Federal Government has announced that it will not introduce any new capital projects in the 2026 budget. Instead, it has directed Ministries, Departments, and Agencies (MDAs) to carry over 70 per cent of their 2025 capital allocations into the 2026 fiscal year.
This directive is contained in the 2026 Abridged Budget Call Circular issued by the Federal Ministry of Budget and Economic Planning and sent to ministers, service chiefs, heads of agencies, and senior government officials in Abuja.
According to the circular, the plan aims to prioritize the completion of ongoing projects while tackling fiscal constraints caused by low revenue performance.
It emphasized that the 2026 budget will exclude provisions for fresh capital projects, noting that annual budget submissions must strictly follow established guidelines, and officials in charge of preparing budgets must comply.
The circular further noted that MDAs must exhaust their already approved 2025 budget allocations before requesting approval for any new ventures.
It stressed that carrying over uncompleted projects will ensure attention is directed to key priorities aligned with the administration’s development agenda.
According to the circular, “MDAs are to upload 70 per cent of their 2025 FGN Budget to continue in FY2026. All such rollover and uploads must be in line with the immediate needs of the country as well as government’s development priorities that aligns with the policy direction of the new administration, which hinges on National Security, the Economy, Education, Health, Agriculture, Infrastructure, Power & Energy, as well as social safety nets, women & youth empowerment. We are constrained by revenue challenges.”
It added that a new funding model has been adopted, capping 2026 capital budget ceilings at 70 per cent of the 2025 allocations. Only 30 per cent of capital funds will be released in 2025, while the remaining 70 per cent will form the basis for next year’s capital spending. The circular warned that MDAs must avoid project duplication and should work within their 2025 overhead ceilings despite rising inflation.
“MDAs are required to work within and not exceed their 2025 overhead ceilings (Executive Proposal) for the purpose of preparing their 2026 overhead budget submissions. While we note the impact of inflation on overhead costs, we are, however, constrained by revenue challenges in providing significantly more for overheads. We will, however, sustain the effort to achieve full release of the overhead budget,” the circular explained.
It also instructed that budget proposals must align with the policy direction captured in the 2026–2028 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Minister of Budget and Economic Planning Senator Abubakar Bagudu stated that the MTEF approved by the Federal Executive Council (FEC) last week outlines key assumptions for the 2026 fiscal year, including revenue expectations, production targets, and strategies to boost grassroots economic activities.
He said the government will prioritize areas that promote productivity amid global funding constraints.
Bagudu referenced the Renewed Hope Agenda, Renewed Hope Infrastructure Development Plan, Ward Development Plan, National Development Plan, and other programmes as core drivers of the economic direction. He added that all spending will undergo strict scrutiny to ensure efficiency and value for money.
The circular reaffirmed the government’s resolve to improve budgeting standards, implementation, monitoring, and evaluation for better outcomes.
It further directed MDAs to submit their proposals through the GIFMIS Budget Preparation Subsystem, while government-owned enterprises must use the Budget Information Management and Monitoring System. All submissions are to be completed by Tuesday, December 9, 2025.
“Personnel costs have already been computed using data from IPPIS and earlier submissions,” the circular added, noting that each ministry will be informed about its 2026 personnel cost limit.
Fiscal governance expert Eze Onyekpere, speaking in an earlier report by The Guardian, warned that running multiple budgets at the same time leads to mismanaged funds, abandoned projects, and poor value for public spending.
He recommended that the unexecuted portion of the 2025 capital budget should serve as the basis for the 2026 plan to put the budget cycle back on track.
He said, “Assuming the fiscal space for capital projects is N20 trillion and the unimplemented part of 2025 is N12 trillion, MDAs should only be asked to prepare N8 trillion new projects to complete the N20 trillion.”
Onyekpere argued that drafting new project lists is unnecessary when many existing projects remain incomplete but are still important.
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