Innovation is central to Nigeria’s long-term economic transformation, industrial competitiveness, and productivity growth. This policy brief examines how the 2026 Federal Budget supports the country’s innovation ecosystem through investments in science, technology, digital economy, and industrial development. While the budget demonstrates increased commitment to innovation, it also highlights critical challenges, including funding volatility, fragmented programme implementation, weak coordination, and limited operational support for innovation infrastructure. The brief outlines key policy recommendations to strengthen implementation, improve results-based budgeting, and ensure that innovation investments translate into productivity gains, quality jobs, economic diversification, and sustained national competitiveness.