To build a 2027 budget in Nigeria, fix your assumptions for inflation, interest rates, the naira, oil and tax first, then run a base case and a downside case around them. Do it before the year-end rush. Headline inflation was 15.39% in August, the CBN has cut its policy rate to 23%, and Brent crude traded above $100 while the federal 2026 budget assumed $64.85.
That spread between plan and market is the lesson. Budgets fail on assumptions long before they fail on arithmetic. Here is a practical way to build yours.
Why does the 2027 budget need fresh assumptions?
Last year's numbers were set in a different economy. The World Bank puts Nigerian inflation at 23.0% in 2025 and 15.7% in 2026, with 12.2% projected by 2028 (Nairametrics report on the October 2026 Africa Economic Update). A budget that simply rolls forward old cost increases will overstate costs and understate margin.
The opposite error is just as costly. High fuel prices tied to the Middle East conflict have not gone away, and the Bank flags spending ahead of the 2027 elections as a risk to the forecast. Stable is not the same as safe.
Which assumptions should a CFO test first?
Start with five, and write down the source and date next to each one:
- Inflation: NBS reported headline inflation of 15.39% for August 2026, down from 15.43% in July. Core inflation was 13.29% and food inflation 19.57% (Nairametrics). Do not apply one blanket rate. Food-heavy and fuel-heavy lines deserve their own.
- Interest rates: the CBN cut the policy rate from 26.5% to 23% in September. Model your debt at today's cost, then test a case where rates stop falling. Our note on the CBN rate cut covers the detail.
- The naira: the official rate was about ₦1,321 to the dollar on 29 September, with the parallel market near ₦1,375. Price imported inputs at a rate weaker than today, not at today's rate.
- Oil: Brent was $102.59 on 29 September while the 2026 federal benchmark was $64.85. If your revenue depends on oil and gas clients, run your numbers at three price points, and read our analysis of $100 oil for context.
- Growth: the World Bank expects 4.3% in 2026 and 4.4% in 2027. Use it as a ceiling for market growth, not a promise of your own sales.
How do you build the budget step by step?
- Start from the 2026 run rate. Use nine months of actuals plus a three-month forecast. Do not start from last year's budget.
- Sort costs into three buckets. Fixed costs, inflation-linked costs, and dollar-linked costs. Each bucket gets its own growth assumption.
- Set prices line by line. If you can pass on cost increases, say how fast. If a contract is fixed-price, say so and cost the gap.
- Run a downside case. A sensible test is revenue 10% lower, the naira 10% weaker and interest rates flat. If the business still pays its debts and salaries, the plan holds. If not, you have found the problem in October rather than in March.
- Turn the profit budget into a cash budget. Map receipts and payments month by month, including tax dates. Profit pays nobody. Cash does. Our piece on how much cash a Nigerian company should hold helps with the buffer.
Which tax costs belong in the budget?
Tax is a line item, not a surprise. Three belong in every 2027 plan:
- The 4% development levy, where it applies to your company. See who pays it.
- E-invoicing compliance, including the cost of systems, training and the ₦200,000-per-invoice penalty for non-compliance. Details are in our e-invoicing penalty guide.
- Late-payment interest, which changed from October 2026. We explain the change in our myth versus fact note.
What does this mean for your business?
A good budget is short, dated and honest about what it does not know. Review it every quarter against actuals, and change the assumptions, not just the totals. Lenders and auditors both respond better to a budget that explains its assumptions than to one that does not.
For listed companies and anyone with loan covenants, a tested budget also supports your going-concern assessment at year end.
FAQ
When should a Nigerian company finish its 2027 budget?
For a 31 December year end, aim for a board-ready draft by the end of November. That leaves time to challenge the assumptions before the year starts.
What inflation rate should I use for 2027?
There is no single rate. The World Bank projects 15.7% for 2026 and 12.2% by 2028, and NBS recorded 15.39% for August. Use a range and apply different rates to food, fuel and wage lines.
Should I budget in naira or dollars?
Report in naira, but track dollar-linked costs separately and test them at a weaker exchange rate. That way a currency move shows up as one clear line, not as a general overrun.
Need help stress-testing your 2027 budget, cash plan or tax position? Contact VOG Global in Area 10, Garki, Abuja, or visit vog.global to speak with our team.