Running a nation without an approved budget is not a minor administrative delay, it is a governance failure with real economic and social consequences. A national budget is more than a financial document; it is the primary instrument through which policy priorities are translated into action, resources are allocated, and accountability is enforced.

When a budget is delayed, governments drift into uncertainty, relying on temporary measures, discretionary spending, and fragmented fiscal decisions. Nigeria’s recurring experience with delayed appropriations offers a clear case study of what this looks like in practice.

 

When There Is No Budget: What Actually Happens

In the absence of an approved budget, governments typically fall back on extensions of previous appropriations or ad hoc spending arrangements. While this may prevent a total shutdown, it creates what can best be described as a soft fiscal paralysis.

Three immediate consequences emerge.

First, PLANNING COLLAPSES. Ministries, Departments, and Agencies (MDAs) lack clarity on funding ceilings and timelines, making it difficult to initiate or sustain projects. Capital investments, roads, hospitals, power infrastructure, are often the first casualties.

Second, SPENDING BECOMES INEFFICIENT. Without a clear framework, expenditures are driven less by strategic priorities and more by short-term administrative needs, weakening fiscal discipline and increasing the risk of waste.

Third, UNCERTAINTY SPREADS ACROSS THE ECONOMY. Contractors delay execution, investors hold back decisions, and public service delivery deteriorates. The absence of a budget signals fiscal instability.

Nigeria has repeatedly experienced these dynamics, entering fiscal years without fully operational budgets and relying on interim arrangements that undermine long-term planning.

 

Nigeria’s 2026 Budget Context

In December 2025, President Bola Ahmed Tinubu presented a ₦58.18 trillion budget proposal for 2026, with projected revenue of ₦34.33 trillion and a deficit of ₦23.85 trillion (approximately 4.28% of GDP).

The structure of the budget reflects mounting fiscal pressures:

  • ₦15.52 trillion for debt servicing
  • ₦26.08 trillion for capital expenditure
  • ₦15.25 trillion for recurrent (non-debt) spending

Key sectoral allocations include:

  • Security: ₦5.41 trillion
  • Infrastructure: ₦3.56 trillion
  • Education: ₦3.52 trillion
  • Health: ₦2.48 trillion

However, delays in passage mean the government continues to operate in a transitional fiscal state, once again exposing the risks of operating without a fully approved budget.

 

The Deeper Problem: A Structural Revenue–Expenditure Gap

Budget delays in Nigeria are not just procedural—they are symptoms of a deeper fiscal imbalance.

Over the past five years, government expenditure has expanded significantly, rising from about ₦13.6 trillion in 2021 to nearly ₦55 trillion in 2025, with ₦58.18 trillion proposed for 2026. This growth has been driven by inflation, exchange rate pressures, and ambitious reform agendas.

 

The graph below illustrates the widening gap:

Fig 1.

However, revenue has consistently lagged behind. Actual revenues have remained far below expenditure needs—estimated at roughly ₦9 trillion in 2021 and improving unevenly to about ₦25 trillion in 2025, with ₦34.33 trillion projected for 2026.

The result is a persistent cycle:

  • Budget delays → weak execution
  • Weak execution → poor revenue performance
  • Poor revenue → increased borrowing
  • Increased borrowing → rising debt burden

With debt servicing alone accounting for a significant share of government expenditure, fiscal space for development continues to shrink. In practical terms, this means stalled infrastructure projects, inconsistent social sector funding, and slower economic recovery.

 

 

Legal Framework vs. Fiscal Reality

Nigeria’s legal framework is clear. The Constitution mandates timely presentation and approval of appropriation bills, while the Fiscal Responsibility Act (2007) sets rules for deficit limits, transparency, and medium-term planning.

In practice, enforcement remains weak. Budget timelines are frequently missed, and overlapping fiscal cycles have become normalized. This undermines the credibility of the budgeting process and weakens institutional accountability.

The 2026 budget signals an intention to restore discipline, but implementation will be the true test.

 

Lessons from Other Countries

Budget delays are not unique to Nigeria, but how they are managed differs significantly.

In the United States, delays can trigger government shutdowns, disrupting services and economic activity. However, structured mechanisms such as continuing resolutions provide temporary funding.

The United Kingdom avoids shutdowns entirely through institutional safeguards like “Vote on Account,” ensuring continuity while budgets are finalized.

Closer to home, Ghana faces similar constraints but maintains clearer transitional mechanisms that reduce fiscal uncertainty.

The lesson is simple: delays may happen, but unmanaged delays are costly.

 

What Needs to Change

Breaking Nigeria’s cycle of delayed budgets requires deliberate reform:

  1. Introduce automatic interim funding mechanisms to allow rule-based spending when budgets are delayed.
  2. Enforce fiscal responsibility laws, with real consequences for non-compliance.
  3. Strengthen revenue mobilization to close the gap between projections and actual collections.
  4. Protect capital expenditure to ensure development priorities are not crowded out.
  5. Improve transparency and monitoring through real-time tracking of budget performance.

 

Conclusion: A Test of Fiscal Discipline

Nigeria’s 2026 budget presents an opportunity to break from a long-standing pattern of delayed appropriations and weak fiscal execution. But the real issue is not just passing a budget; it is restoring the credibility of the budgeting process itself.

A country can function briefly without a budget. But when it becomes routine, the costs accumulate: economically, institutionally, and socially.

Ultimately, running without a budget is not just a technical lapse. It is a signal of deeper governance challenges. Addressing it will require more than reforms on paper. It demands discipline, enforcement, and political will.

The choice is clear: fiscal order or continued instability.