President Bola Tinubu has directed the Budget Office to operationalise a clearer framework to share the cost of electricity subsidies across the federation.
The adoption of the framework, is to libralise the burden and not to be treated as an open-ended federal residual, Director – Gederal, Budget Office of the Federation (BOF) Mallam Tanimu Yakubu relayed President Tinubu directive to revenue officers from Ministries Departments and Agencies (MDAs) attending a four day workshop on Integrated Financial Management Information System( (GIFMIS/BPS) organized by BOF in Abuja. He was represented by Director of Expenditure, Mr. Yusuf Mohammed.
This was as the government warned budget officials across MDAs of drastic changes in budget implementation with effect from the 2026 budget. It warned that implementation of the 2026 budget of ₦58.47 trillion will strictly be in line with appropriated details and timelines.
Conveying president Tinubu’s directive on operationalizing electricity subsidy, Tanimu said: “Mr. President has directed that we operationalise a clearer framework to share the cost of electricity subsidies across the federation—so the burden is not treated as an open-ended federal residual.
“Let me be direct. If we want a stable power sector, we must pay for the choices we make. When tariffs are held below cost, a gap is created. That gap is a subsidy.
“And a subsidy is a bill. In 2026, we will stop pretending that this bill can be left to the federal government alone—especially where the policy choice or the political benefit is shared across tiers of government”.
Tanimu gave further clarity to President’s directive: “Mr. President’s directive is to invoke the electricity-sector legal framework to make burden-sharing practical and transparent.
“This means: subsidy costs must be explicit, tracked, and funded—so they do not return as arrears, liquidity crises, or hidden liabilities in the market.
“It also means that if any tier of government chooses affordability interventions, the funding responsibilities must be clear, agreed, and enforceable. This is not punishment. It is alignment.
“When everyone carries a fair share of the cost, everyone also has an incentive to support cost-reflective efficiency, targeted protection for the vulnerable, and a power market that can actually deliver.”
Tanimu spelt out what would be the role of MDAs in the new electricity tariff order.
“For MDAs, the implication is simple. Make subsidy-related costs visible in your planning and submissions.Do not push liabilities into the market as arrears or unfunded commitments. Support transparent, rules-based attribution and financing of affordability decisions.”
He urged MDAs officials in charge of budget at their various organizations to adhere, comply and make fiscal rules framework as guiding principles.
“Second, Mr. President has directed that we enhance the dynamism of fiscal rules through a review of the Fiscal Responsibility framework.
“Fiscal rules are not a slogan. They are the guardrails of government. Without guardrails, spending becomes impulsive, debt becomes casual, and the budget becomes a statement of intent rather than a tool of delivery.
“But rules must also be smart. They must respond to volatility without collapsing under pressure. That is why the 2026 direction is not to abandon rules, but to modernise them—so they work in today’s Nigeria.
“Mr. President’s directive is to review the fiscal responsibility framework to make it more dynamic and more enforceable. That means clearer fiscal anchors, better-defined escape clauses for genuine shocks, and a credible path back to compliance when those clauses are used.
“It means stronger reporting, tighter discipline around contingent liabilities, and a firmer link between the medium-term framework and annual appropriations. For MDAs, this changes the conversation.
“You will not only be asked what you want to spend. You will be asked how it fits the fiscal rules, how it affects sustainability, and what measurable results it will deliver.
So, treat fiscal compliance as part of programme design.Build proposals that respect fiscal anchors and cash realities.
Justify trade-offs clearly, with outputs and outcomes.
Identify and disclose risks early—especially contingent liabilities and commitments”, Yakubu directed.
In spite of the implementation challenges faced by the 2025 budget, the government said it realized ₦20.7 trillion revenue in October 2025, indicating 61% target while it committed ₦31.89 trillion into expenditure ( representing 79% of the target).
Out of realized revenue, ₦13.69 trillion was applied to debt service and N7.09 trillion committed to personnel and pensions. As of October 2025, the sum of₦8.10 trillion (58% of total) was spent on capital. Following the extension of 2024 capital budget execution to December 2025, a total of ₦2.23 trillion was released for 2024 capital projects implementation as of June 2025.
In the 2026 fiscal year with a projected total expenditure of ₦58.47 trillion, the government projected ₦33.20 trillion revenue and ₦15.52 trillion for debt servicing. It has recurrent (non‑debt) expenditure of ₦15.25 trillion, Capital expenditure of ₦25.68 trillion and budget deficit sum of₦25.27 trillion representing 4.53% of GDP.
To avoid the lapse that characterised 2024 and 2025 budgets government expected MDAs to prioritize programmes within fiscal ceilings provided.
