Venezuela Crisis Could Create $10B Gap in Nigeria’s N58 Trillion 2026 Budget
Nigeria’s 2026 spending plan, pegged at N58.18 trillion, could face a $10 billion shortfall due to the unfolding crisis in Venezuela and potential disruptions to global oil markets. Analysts warn that a resurgence in Venezuelan oil production, backed by U.S. investment following President Nicolás Maduro’s capture, may exert downward pressure on crude prices. This scenario threatens to undermine Nigeria’s oil-dependent budget assumptions and intensify fiscal fragility.
The government had projected raising about $40.6 billion from oil sales, based on producing 1.84 million barrels per day at a benchmark price of $64.85 per barrel. However, with Venezuela potentially returning more barrels to global markets and some analysts predicting prices could dip to $50 per barrel, the nation risks losing an estimated $10.24 billion in revenue. This comes after Nigeria already struggled with a N30 trillion revenue shortfall in 2025.
Experts say the consequences extend beyond immediate budget gaps. Lower oil prices could weaken foreign exchange inflows, putting pressure on the naira and complicating efforts to stabilize the currency. “The oil benchmark is ambitious given current structural constraints, underinvestment, and pipeline vandalism,” said petroleum economist Prof. Wunmi Iledare. He added that more conservative assumptions and stronger non-oil revenue mobilization are urgently needed to shield the budget from shocks.
Global oil politics further complicate the outlook. Eight major producers, including Saudi Arabia and Russia, reaffirmed commitment to OPEC-backed market stability, while the U.S. plans to invest heavily in Venezuela’s oil infrastructure. Analysts warn that increased Venezuelan output could intensify competition for export markets, particularly the U.S., India, and China, affecting Nigeria’s medium and light crude sales.
While fiscal reforms, including Nigeria’s January 2026 tax overhaul, aim to reduce dependence on oil, experts caution these measures may take time to generate meaningful buffers. Economists like Prof. Emmanuel Nwosu advise a more cautious, “austerity-minded” approach to budgeting, noting that Nigeria has limited room to absorb shocks without risking revenue shortfalls and increased borrowing pressures. The 2026 plan, they argue, must account for global oil volatility and structural domestic challenges to avoid further fiscal strain.
source: The Guardian