FG Releases Naira to Dollar Exchange Rate Target for 2026
- The Federal Government has announced the 2026 budget exchange rate projection and also the oil price benchmark
- In the approved document, GDP growth is projected at 4.68%, with gross federation revenue estimated at N50.74 trillion
- Nigerian government has projected N20.10 trillion budget deficit, with major spending allocated to debt service, statutory transfers, and non-debt recurrent expenditure
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The federal government has approved a budget exchange rate of N1,512 to $1 for 2026 as part of its 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
In 2025, the federal government set the exchange rate at N1,400 to a dollar
Source: Twitter
The MTEF/FSP, a statutory three-year fiscal guide, sets assumptions that will underpin the 2026 Appropriation Bill, including oil/output benchmarks, revenue projections, deficit limits, and spending priorities.
FG shares new projections for 2026
Abubakar Atiku Bagudu, the Minister of Budget and Economic Planning, who disclosed the framework at a briefing in Abuja on Wednesday, December 3, also revealed a conservative oil price benchmark of $64.85 per barrel.
The minister said the framework developed with input from ministries, the private sector, civil society, and development partners and will be transmitted to the National Assembly by Monday, December 8.
He explained that the MTEF proposes two oil production targets: an ambitious 2.06 million barrels per day (mbpd) and a lower 1.80 mbpd figure for budgeting purposes.
The minister noted that pre-election spending could influence the exchange rate.
Bagudu said:
"For the first time, a target oil production as well as benchmark oil production were adopted.
"The target oil production is 2.06 million barrels per day, which the management of the oil industry is tasked to produce. However, so that we don’t run into revenue problems, we use a benchmark oil production figure of 1.8 mbpd for budget purposes."
On the price benchmark, Bagudu added:
"Even the oil benchmark of $64.85 is lower than the average selling price of Nigeria’s crude oil, because Nigeria is a premium Bonny Light producer. But for an abundance of caution, we are using $64.85."
"The 2026 macro assumptions also include a GDP growth projection of 4.68%.
"Given that 2026 is a pre-election year, there is a lot of election activity spending that can typically affect the exchange rate.”
Source: Getty Images
Tinubu govt's projections
According to the minister, gross federation revenue is estimated at N50.74 trillion, with the Federal Government expected to receive N22.60 trillion, states N16.30 trillion, and local governments N11.85 trillion, Vanguard reports.
Punch reports that total federal government revenue is projected at N34.33 trillion, including N4.98 trillion from government owned enterprises, a sixteen percent decline from the 2025 budget estimate.
He outlined the major spending heads include statutory transfers of around N3 trillion, debt service of N15.91 trillion, and non debt recurrent expenditure of about N15.27 trillion.
While the projected deficit is N20.10 trillion, roughly 3.61 percent of GDP, implying a total federal spending envelope of N54.43 trillion.
Expert reaction
Reacting to the details of MTEF, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), told Legit.ng:
"The 2026–2028 MTEF represents a positive step toward embedding fiscal realism, strengthening budget credibility, and aligning national expenditure with Nigeria’s actual implementation capacity.
"For Nigeria’s budget process to evolve into a truly effective tool of governance rather than an annual procedural formality, both the Executive and the Legislature must uphold realistic and evidence-based assumptions, transparent and credible fiscal planning, discipline in public expenditure, and improved implementation efficiency. If sustained, these reforms will help entrench macroeconomic stability, rebuild public confidence, and enhance the credibility of the budget process."
FX reserves hit $43bn
Earlier, Legit.ng reported that Nigeria’s external reserves increased to $42.202 billion on Wednesday from $42.169 billion the previous day.
The rise was driven by steady inflows from crude oil sales, diaspora remittances, and renewed foreign portfolio investments.
The stronger reserves position enhances Nigeria’s capacity to stabilise its currency, meet external obligations, and reassure international investors of improved macroeconomic fundamentals.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
