The Federal Government has rejected concerns raised over Nigeria’s debt position after the World Bank reported that interest payments exceeded Federal Government revenue during the first half of 2026.
The World Bank’s October 2026 Nigeria Development Update put Federal Government revenue at ₦6.2 trillion between January and June, while interest payments stood at ₦7.7 trillion. Based on those figures, interest costs were equivalent to about 124 per cent of revenue.
However, the Federal Ministry of Finance has challenged the interpretation of the figures, arguing that the comparison does not provide a complete picture of the government’s fiscal position.
In a statement issued on Sunday and shared by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the ministry said the 124 per cent figure was misleading because the revenue and debt figures did not cover exactly the same scope.
FG Questions Basis of 124% Calculation
The ministry explained that part of the debt included in the interest-payment figure relates to obligations the Federal Government services on behalf of other levels of government, including external loans obtained by state governments.
According to the ministry, comparing those obligations with Federal Government revenue alone results in an overstated ratio because the debt and revenue figures cover different levels of government.
It also argued that the revenue figure used in the assessment was incomplete.
The ministry said some internally generated revenue earned by government agencies and enterprises had not yet been transferred to the Treasury and was therefore not reflected in the reported figure.
It further pointed out that the timing of tax payments means some government revenue is typically received later in the year. Consequently, it argued that using only six months of revenue to assess annual debt obligations could produce a distorted picture of fiscal sustainability.
Revenue Growing Faster Than Interest Costs
The Finance Ministry also pointed to improvements in revenue collection as evidence that the country’s fiscal position is moving in a positive direction.
According to its figures, Federal Government revenue increased by 72 per cent, from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion during the corresponding period of 2026.
Interest payments, meanwhile, rose by 38 per cent, increasing from ₦5.6 trillion to ₦7.7 trillion.
The ministry therefore argued that government revenue was expanding considerably faster than interest costs. It said this resulted in a decline of about 32 percentage points in the interest-to-revenue ratio over the period.
The difference between interest payments and revenue also narrowed from approximately ₦2 trillion in the first half of 2025 to ₦1.5 trillion in the first half of 2026.
The ministry described the trend as evidence that the government’s economic reforms were beginning to improve fiscal conditions rather than signalling an immediate debt crisis.
FG Says Full-Year Figures Give Better Picture
The government also questioned the use of a six-month snapshot as the basis for judging Nigeria’s debt sustainability.
It cited the World Bank’s own projection that Nigeria’s full-year 2026 debt service, covering both principal and interest payments, would amount to 46 per cent of revenue.
The ministry argued that the full-year projection provides a more meaningful benchmark because government revenue and expenditure patterns vary throughout the year.
The World Bank’s assessment, however, has highlighted the pressure created by rising debt costs. Its report noted that interest payments increased by about 37.5 per cent year-on-year, largely amid elevated domestic borrowing costs.
Government Defends Borrowing Programme
The Federal Government also defended its borrowing activities, maintaining that loans obtained under the current administration were properly authorised.
The Ministry of Finance said borrowing remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the government’s approved borrowing plan.
It added that federal borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, while information on the country’s debt obligations is regularly published by the Debt Management Office.
The government’s response comes amid wider debate over whether Nigeria’s rising debt-service obligations could constrain spending on infrastructure and other critical areas.
While the World Bank has drawn attention to the scale of interest payments, the Federal Government maintains that stronger revenue collection and ongoing fiscal reforms are improving the country’s capacity to manage its obligations.
The disagreement therefore centres not only on the size of Nigeria’s interest payments, but also on the appropriate way to measure those payments against government revenue and assess the country’s broader debt sustainability.
