By Ese Ufuoma
Nigeria’s 2026 fiscal ambitions are anchored to a number that is as bold as it is consequential: N60.97 trillion in projected oil revenue. It is a figure that towers above previous evaluations, now sits at the heart of the federal government’s budget framework, promising relief for strained public finances while quietly reopening old debates about realism, risk, and the country’s enduring dependence on crude oil.
The projection is built on a set of assumptions that, on paper, appear cautiously optimistic. The government expects average crude oil production of 1.84 million barrels per day, an evaluated oil price of $64.85 per barrel, and an exchange rate of roughly N1,400 to the dollar. Combined, these variables translate into projected oil receipts of approximately $43–44 billion, which, when converted at official rates, yield the N60.97 trillion figure.
However, Nigeria’s recent oil history suggests that projections alone do not guarantee outcomes. Over the past five years, budgeted oil revenues have consistently fallen short of expectations, not necessarily because global prices collapsed, but because production targets proved stubbornly elusive. Pipeline vandalism, crude theft, underinvestment in upstream assets, and operational inefficiencies have repeatedly dragged output below planned levels, sometimes by hundreds of thousands of barrels per day. In 2023 and 2024, for instance, Nigeria struggled to sustain production above 1.5 million barrels daily, despite higher global prices during parts of that period.
Yet, 2026 enters the picture with a slightly altered context. Security improvements in parts of the Niger Delta, increased surveillance of critical infrastructure, and renewed partnerships with private operators have helped lift production closer to official targets. The Nigerian National Petroleum Company Limited (NNPC) has also pointed to declining crude theft volumes and improved evacuation capacity, developments that lend some credibility to the government’s assumptions. Nevertheless, these gains remain fragile, dependent on continued enforcement, community engagement, and investment flows that are vulnerable to political and fiscal uncertainty.
Exchange rate assumptions add another layer of complexity. The projection relies on a N1,400/$ rate, reflecting ongoing foreign exchange reforms and efforts to stabilise the naira through market-driven pricing. However, oil revenues are ultimately converted through a system still struggling with liquidity constraints, import demand pressures, and confidence issues. Any significant depreciation would inflate naira-denominated oil revenue on paper while simultaneously increasing debt servicing costs and import bills, blunting the real fiscal benefit. In that sense, higher nominal oil revenue does not automatically translate into stronger public finances.
Moreover, the prominence of oil in the 2026 revenue framework underscores a contradiction that Nigeria has yet to resolve. While policymakers repeatedly emphasise economic diversification, oil continues to account for the bulk of foreign exchange earnings and a significant share of government revenue.
In addition, Nigeria’s debt profile heightens the stakes attached to this projection. With debt servicing costs consuming a substantial share of government revenue, any shortfall in oil earnings would force difficult trade-offs between borrowing, spending cuts, or delayed obligations. The N60.97 trillion target is therefore not merely a revenue estimate; it is a linchpin supporting broader fiscal stability. Missing it would waive through budget implementation, capital expenditure, and social spending commitments, amplifying the cost of miscalculation.
Still, it would be reductive to dismiss the projection as wishful thinking. The assumptions reflect lessons learned from years of overly aggressive benchmarks that collapsed under the weight of reality. They also signal a renewed effort to align fiscal planning with operational reforms in the oil sector, from production recovery initiatives to tighter crude-tracking mechanisms. If Nigeria can sustain current gains in output, manage price volatility prudently, and maintain currency reforms, the N60.97 trillion figure may prove less aspirational than past projections.
Ultimately, the evaluation of Nigeria’s oil revenue outlook is not a question of arithmetic alone but of institutional discipline. Oil can still fund the present, but only credible governance, diversification, and restraint can secure the future. The 2026 projection, therefore, stands as both an opportunity and a warning, a reminder that while oil may yet deliver N60.97 trillion, the true test lies in how prepared Nigeria is for the day it does not.
