The federal government has disputed the World Bank’s finding that its interest payments reached 124 per cent of revenue in the first half of 2026, saying the calculation compares debt obligations and revenue that do not cover the same level of government. The Federal Ministry of Finance said the figure, drawn from the World Bank’s October 2026 Nigeria Development Update, compares interest payments that include debts serviced on behalf of states with federal revenue alone.
It argued that the calculation does not match the debt and revenue bases, thereby exaggerating the true scale of Nigeria’s interest burden. The ministry, on Sunday stated that the interest payments cited in the report included external loans contracted by states and other tiers of government but serviced by the Federal Government. It said measuring those obligations against federal revenue alone was misleading because the debt and revenue figures do not cover the same level of government.
The ministry also said the reported revenue excludes independent revenue earned by government agencies and enterprises but not yet remitted to the Treasury. It added that more revenue is usually collected in the second half of the year because of the timing of certain statutory tax payments, making a six-month ratio an unreliable measure of debt sustainability. The ministry said federal revenue rose by 72 per cent to N6.2 trillion in the first half of 2026, from N3.6 trillion in the same period of 2025.
Interest payments rose by 38 per cent to N7.7 trillion from N5.6 trillion over the same period. As a result, the interest-to-revenue ratio fell from 156 per cent to 124 per cent, while the gap between interest payments and reported federal revenue narrowed from N2.0 trillion to N1.5 trillion. The ministry said revenue was growing almost twice as fast as interest costs, describing the trend as evidence that the government’s fiscal reforms were working.
According to the ministry, debt sustainability should be assessed on a full-year basis rather than from a half-year snapshot. It cited the same World Bank report, which projects Nigeria’s full-year 2026 debt service—covering both interest and principal—at 46 per cent of revenue. According to the ministry, the full-year 2025 debt-service-to-revenue ratio was below 60 per cent, down from 97 per cent before the current reforms.
It said those figures showed an improving fiscal position rather than fiscal distress. The ministry maintained that all federal borrowing was lawful and approved. It said every naira borrowed by the federal government fell within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan. It added that borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, and was regularly published by the Debt Management Office.
The ministry welcomed scrutiny of public finances but urged analysts and commentators to compare like with like, place figures in context and seek clarification where data were unclear.
