The draft Nigeria Economic Policy Framework and the necessity of fiscal discipline, By Uddin Ifeanyi

What to make of the new draft economic framework within this context? First, a question: Can Nigeria establish a credible long-term economic policy framework if its own budgetary practices make nonsense of the discipline, predictability, and accountability that this very framework is expected to put in place?.. Far easier, then, to appraise the framework on how well it bridges the now chronic gulf between our publicly expressed economic objectives as a country, and our actual capacity to execute policy.

My friend’s initial reaction to receiving a copy of the “Nigeria Economic Policy Framework: Public Consultation Document”, issued by the Federal Ministry of Finance (for consultation from 26 October to 27 November, 2026), was to ask how this document explains the fact that the federal government is “running three annual budgets simultaneously.” She also wanted to know what, despite this document, we are to make of the fact that ahead of the 2027 budget, the 2026–2028 MTEF/FSP (Medium-Term Expenditure Framework/Fiscal Strategy Paper) is not publicly available — even when the Budget Office said the draft MTEF/FSP was concluded in July.

I did not have an answer to either question, and I am certain the ironies are not lost on the federal government, but the busybody quotient aside, how does any of this matter? A teacher, she surely leads classes in informed conversations on these themes and opens senior management retreats with PowerPoint decks bristling with numbers, tables, and graphs from such papers. Then what? In the local argot, “Who has any of this knowledge helped, and how?”

The truth is that these numbers have mattered not so much as Google Maps for how the government plans to drive the country’s finances. Instead, our governments understand that financial markets — especially the ones we are in hock to for significant parts of the national debt and our recent foreign exchange purchases — expect that these documents will be prepared and published. Transparency and accountability requirements? Checked! Yet nothing gives away the cynical nature of this box-checking impulse than the Tinubu government’s continuation of the practice of overlapping budgets.

And the 2026 annual budget? Why bother? The more important concern is that when appropriation from multiple financial years feed into themselves this way, it is well-nigh impossible to know which budget paid for which project, how much was spent, and if the original allocation achieved its aim. Put differently, the captain of the ship of state is navigating choppy waters with blindfold on.

Despite the incumbent federal government’s promise to close previous capital liabilities by 31 March, 2026, with a single budget cycle beginning in April, the capital expenditure component of the 2024 budget was extended into 2025. While there is no evidence that this bit of the 2024 appropriation act remains active today, we know that the 2025 appropriation act’s capital expenditure provision has been extended four times and is now authorised to run until year-end.

And the 2026 annual budget? Why bother? The more important concern is that when appropriation from multiple financial years feed into themselves this way, it is well-nigh impossible to know which budget paid for which project, how much was spent, and if the original allocation achieved its aim. Put differently, the captain of the ship of state is navigating choppy waters with blindfold on. Do not even bother trying to explain the “Why?” of this practice. Everything, from insufficient revenue, through cash-flow management and procurement delays, to competing spending commitments, could be complicit. But what is not in doubt is that few episodes associated with the Tinubu government raise more red flags about fiscal indiscipline than this.

What to make of the new draft economic framework within this context? First, a question: Can Nigeria establish a credible long-term economic policy framework if its own budgetary practices make nonsense of the discipline, predictability, and accountability that this very framework is expected to put in place? Chicken-and-egg puzzles nearly always leave me at sixes and sevens. Far easier, then, to appraise the framework on how well it bridges the now chronic gulf between our publicly expressed economic objectives as a country, and our actual capacity to execute policy.

The big problem with all of these is that to date, the very same institutions responsible for setting policy and executing budgets are also expected to ensure compliance with targets. Thankfully, the new economic policy framework puts forward the idea of independent assessment of these measures. In order for any of these to work, however, we still will have to work out the specific legal powers, how to share this, funding…

Even here, the auguries are ominous. And I exaggerate only ever so slightly. There is nothing wrong with the document’s nod to the absence of enduring standards for measuring economic performance as key weaknesses of Nigeria’s economic management. But the design of an explicit rule governing the life of an appropriation and the consequences of failing to execute it within the authorised period, would have been a far more useful contribution to the redesign of our fiscal infrastructure. Any other suggestions? Could we agree on a medium-term cap on the fiscal deficit? This limit will clearly state how we prefer to measure the deficit, and what recourses we agree to in the event of a breach.

Would a debt sustainability framework that considers interest costs, revenue capacity, maturity, and foreign-currency exposure be of much use? I believe so. As would the enactment of borrowing covenants that describe the purposes for which loans are sought, approval procedures, disclosure requirements, and how new borrowing will be repaid. I take mandatory reporting on appropriations, releases, commitments, actual payments, and project completion as non-negotiable requirements of the budget execution process, even as I believe we all agree that the medium-term expenditure ceiling must be consistent with realistic revenue projections.

The big problem with all of these is that to date, the very same institutions responsible for setting policy and executing budgets are also expected to ensure compliance with targets. Thankfully, the new economic policy framework puts forward the idea of independent assessment of these measures. In order for any of these to work, however, we still will have to work out the specific legal powers, how to share this, funding, and access to information or publication rights required for effective independent scrutiny.

Uddin Ifeanyi, a journalist manqué and retired civil servant, can be reached @IfeanyiUddin.