Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, has assured that the Federal Government is refining its current payment framework to enhance the implementation of the national budget.
He expressed optimism over the execution of the proposed N58.472 trillion 2026 budget, noting that intensified efforts to increase revenue inflows into the Federation Account are already yielding results.
According to Edun, improved remittances are expected from Nigerian National Petroleum Company Limited (NNPCL), in line with directives from President Bola Ahmed Tinubu.
The minister made these remarks during an interactive meeting between the Senate Committee on Finance and the Federal Government’s Economic Management Team in Abuja.
Present at the session were Minister of Budget and Economic Planning, Atiku Bagudu; Chairman of the Nigeria Revenue Service, Zach Adedeji; representatives of NNPC Limited; Governor of the Central Bank of Nigeria, Yemi Cardoso; and Comptroller-General of Customs, Bashiru Adeniyi, among others.
Meanwhile, the Federal Government has directed all Ministries, Departments and Agencies (MDAs) to strictly comply with the provisions of the Medium-Term Expenditure Framework (MTEF).
Secretary to the Government of the Federation, George Akume, who issued the directive in Abuja, said adherence to the framework is crucial to reinforcing the credibility and transparency of the country’s budgeting process.
Akume gave the directive when the management of the Fiscal Responsibility Commission (FRC), led by its Executive Chairman, Victor Chinmerem Muruako, paid him a visit.
He stressed that strict compliance with the MTEF by all MDAs was mandatory to safeguard the integrity of the national budget and ensure a coordinated, disciplined fiscal environment capable of supporting sustainable economic growth.
At the interactive session, Edun explained that projects would undergo a prioritisation process involving MDAs, the finance team and ultimately the President.
“The prioritisation will be from MDAs first, then the finance team, and then Mr President will have the final say,” he said.
Responding to concerns raised by lawmakers over the existing payment system, Edun maintained that adjustments were underway.
“The payment method will be improved. We should not throw the baby away with the bath water but seek to improve it,” said the minister.
Members of the committee had advocated a return to the previous payment structure instead of the current envelope budgeting model.
Chairman of the Committee, Mohammed Musa, in his opening remarks, said feedback from MDAs during the ongoing budget defence sessions underscored the need for urgent structural reforms ahead of the 2026 fiscal cycle.
“This meeting is not routine. The 2026 fiscal cycle must reflect not only macroeconomic adjustments, but structural reforms capable of repositioning our economy for sustainable growth, fiscal resilience and development,” he said.
On budgeting methodology, Musa argued that the envelope system had failed and should give way to a priority- or performance-based framework.
“Specifically, based on submissions made by heads of various agencies during the ongoing budget defence sessions, the envelope system of budgeting has failed and needs to be replaced by priority based model.
“The incremental allocation model has outlived its usefulness. It promotes routine expenditure expansion rather than strategic prioritisation.
“You can see on paper that there is money, but where is the money? If, by December, we cannot assess ourselves realistically, then the system is failing. We must return to a disciplined budget cycle where one fiscal year ends before another begins,” Musa said.
He added that Nigeria must align its budgeting approach with international standards.
“Nigeria cannot aspire to global competitiveness while operating a budgeting framework anchored in outdated assumptions. We need to do a new economic outlook. We need to go back like the advanced countries”.
The committee also criticised the centralised payment system, saying it has left contractors unpaid for completed projects.
“Similarly, the centralised system of payment, which has led to many contractors remaining unpaid for projects already executed, should be replaced with the old system, which allows the various MDAs pay contractors they gave jobs to,” Musa said.
He warned that delayed fund releases, weak revenue remittances and poor execution of capital projects were undermining public confidence.
“These patterns widen fiscal deficits, weaken service delivery and erode the credibility of the budgeting process,” he said, stressing that borrowing must translate into productivity, infrastructure development and long-term growth.
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