FG Caps 2026 Capital Budget for MDAs at 70% of 2025 Allocation
By Patience Ikpeme
The Federal Government has released the 2026 Budget Call Circular, setting a strict new financial framework that limits Ministries, Departments, and Agencies (MDAs) to spending no more than 70% of their 2025 project allocations on capital projects in the upcoming fiscal year.
The Circular, signed by the Minister for Budget and Economic Planning, Senator Abubakar Bagudu, lays out the definitive requirements and instructions for preparing the 2026 Federal Government of Nigeria (FGN) Budget Proposal.
Under this new approach, the government has moved away from the traditional full rollover process. The plan is predicated on the government’s commitment to release 30% of the 2025 Capital Budget within the current fiscal year, with the remaining 70% balance being directly retained as the foundation for the 2026 budget.
In a significant directive aimed at fiscal responsibility and project continuity, MDAs are strictly required to utilize only the projects and ERGP codes from the approved 2025 budget. The Circular explicitly states that “no new projects should be introduced” into the 2026 submissions.
Submissions that violate the 70% ceiling or include unapproved new projects “will be considered non-compliant,” with the Budget Office of the Federation reserving the right to adjust such proposals down to the approved ceiling.
The capital budget focus must align with national priorities and the current administration’s policy direction, which includes National Security, the Economy, Education, Health, Agriculture, Infrastructure, Power & Energy as well as social safety nets, women & youth empowerment. MDAs are required to upload 70% of their 2025 FGN Budget to continue into FY 2026, ensuring the rollover aligns with these critical development areas.
The Circular also addressed recurrent expenditure, requiring MDAs to “work within and not exceed their 2025 overhead ceilings” for their 2026 Overhead budget submissions.
While acknowledging the pressure of rising costs, the government cited constraints in providing a significant increase.
The Circular notes: “While we note the impact of inflation on overhead costs, we are however constrained by revenue challenges in providing significantly more for overheads. We will however sustain the effort to achieve full release of the overhead budget.”
Bagudu personally cautioned all officers responsible for budget preparation to ensure meticulous compliance with the new guidelines.
“All Ministers/Chief Executives/ Accounting Officers and other officers responsible for budget preparation are advised to read this Budget Call Circular carefully,” the document stated.
Mr. Bagudu further advised that: “All are also enjoined to strictly adhere to these guidelines and instructions including, but not limited to, the revenue and cost optimisation measures indicated herein.”
The preparation of budget estimates must also integrate the policies and strategies contained in the 2026 – 2028 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), which serves as the government’s pre-budget statement.
To improve efficiency, the 2026 budget will be prepared using the Budget Preparation Subsystem (BPS) on the GIFMIS platform. All MDAs are required to prepare and submit their budgets online using this platform.
The submission deadline for both MDAs and Government Owned Enterprises (GOEs) using the Budget Information Management & Monitoring System (BIMMS) is Tuesday, December 9, 2025.
The Circular explicitly states that the “Chief Executive/Accounting Officer of each MDA takes responsibility for proper preparation and prompt submission of its budget.”
