The Federal Government has projected total revenue of N33.39 trillion for the 2026 fiscal year, while proposing to spend N15.91 trillion on servicing public debt, according to details of the 2026 Appropriation Bill currently before the National Assembly.

Breakdown of the revenue framework shows that the Federal Government expects the largest share of its income to come from net federation revenues estimated at N20.20 trillion. This includes N18.84 trillion from the Federal Government’s share of the main Federation Account, N1.29 trillion from the Value Added Tax pool, and N63.85 billion from the Electronic Money Transfer Levy.

Independent revenue is projected at N4.31 trillion, reflecting expected inflows from government-owned enterprises and agencies. Of this amount, tax-related independent revenue is estimated at N124.25 billion, while non-tax revenue is put at N845.98 billion.

Operating surplus from ministries, departments and agencies is expected to contribute N3.34 trillion, underscoring the government’s continued reliance on remittances from MDAs to support budget financing.

Dividend income from government-linked enterprises is projected at N247.70 billion. Nigeria Liquefied Natural Gas Limited is expected to remit N135.14 billion, while the Development Bank of Nigeria and the Bank of Agriculture are projected to contribute N57.97 billion and N51.05 billion respectively. Galaxy Backbone is expected to pay N3.55 billion, while no dividend is projected from the Bank of Industry.

The budget also anticipates N1.37 trillion from foreign aid and grants, indicating sustained engagement with development partners. Special levies and transfers to designated government accounts are estimated at N300 billion.

Revenue from government-owned enterprises is projected at N9.40 trillion but adjusted downward by N4.42 trillion classified as operating surplus already captured under independent revenue, resulting in net revenue of N4.98 trillion from this source.

Other revenue sources are expected to yield N1.99 trillion, including N1.90 trillion from development levies, N22.68 billion from domestic recoveries, assets and fines, and N65.05 billion from oil price royalty receipts. No revenue is projected from signature bonuses or renewals within the period.

On the expenditure side, the Federal Government plans to allocate N15.91 trillion to debt servicing in 2026, highlighting the growing burden of debt obligations on public finances.

Domestic debt service, including Ways and Means advances, is estimated at N10.16 trillion, while foreign debt service is projected at N5.36 trillion. This indicates that the government will spend significantly more servicing domestic debt than external obligations.

The N10.16 trillion domestic debt service covers interest and principal repayments on instruments such as Federal Government bonds, Treasury bills, Sukuk, savings bonds and Ways and Means advances from the Central Bank of Nigeria. Ways and Means, originally designed as short-term overdrafts to cover cash shortfalls, have accumulated into a substantial stock of debt with rising interest costs.

Foreign debt service of N5.36 trillion relates to obligations to multilateral institutions, bilateral partners and holders of Nigeria’s Eurobonds. These payments are largely denominated in foreign currency, increasing pressure on external reserves and the foreign exchange market and exposing the budget to exchange rate risks.

In addition, the Federal Government has earmarked N388.54 billion for a sinking fund to retire maturing promissory notes, bringing total debt service provisions for the year to N15.91 trillion.

Overall, the figures show that debt servicing will absorb nearly half of the Federal Government’s projected revenue in 2026, significantly constraining fiscal space for capital projects, social services and economic development programmes, while underscoring the growing impact of domestic borrowing on the national budget.