The Federal Government has faulted the World Bank’s assessment of Nigeria’s debt position, dismissing concerns that interest payments of N7.7tn in the first half of 2026 threaten the country’s debt sustainability.
The Federal Ministry of Finance described reports that interest payments amounted to 124 per cent of Federal Government revenue during the period as misleading, arguing that the calculation relied on incomplete revenue figures and included debt obligations serviced on behalf of state governments.
The ministry stated its position in a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
According to the ministry, Nigeria’s fiscal position had improved, with revenue growing faster than interest payments.
It said, “The Federal Ministry of Finance has noted recent analysis and public commentary which, citing the World Bank’s October 2026 Nigeria Development Update, claims that Federal Government interest payments reached 124 per cent of revenue in the first half of 2026. This conclusion is misleading, for three reasons.”
The response followed reports based on the World Bank’s October 2026 Nigeria Development Update, which put Federal Government revenue at N6.2tn and interest payments at N7.7tn in the first half of the year.
An analysis of the published figures by The PUNCH showed that interest payments represented approximately 124.2 per cent of revenue, exceeding revenue by N1.5tn. The ratio was calculated from the figures published by the World Bank and was not expressly stated in the report.
However, the ministry argued that the calculation compared obligations covering multiple tiers of government with revenue attributed solely to the Federal Government.
“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states. Measuring this against federal revenue alone overstates the ratio, which is only meaningful when debt and revenue cover the same level of government,” it said.
The ministry also argued that the revenue figure excluded income earned by government agencies and enterprises but not yet remitted to the Treasury.
It added that statutory payment schedules meant some taxes were collected predominantly in the second half of the year, making first-half revenue an incomplete basis for assessing annual debt obligations.
According to the ministry, the interest-to-revenue ratio stood at 156 per cent in the first half of 2025, compared with approximately 124 per cent in the corresponding period of 2026.
It said the full-year debt-service-to-revenue ratio had fallen below 60 per cent, compared with 97 per cent before the current administration’s reforms, describing the reduction as evidence of improved fiscal management.
The ministry further stated that Federal Government revenue rose by 72 per cent, from N3.6tn in the first half of 2025 to N6.2tn in the corresponding period of 2026, while interest payments increased by 38 per cent, from N5.6tn to N7.7tn.
Consequently, it said, the interest-to-revenue ratio declined by about 32 percentage points, while the gap between interest payments and revenue narrowed from N2tn to N1.5tn.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry declared.
It also rejected the use of a six-month fiscal snapshot as a definitive measure of debt sustainability, arguing that full-year projections provided a more appropriate assessment.
“The same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46 per cent of revenue. This is the appropriate benchmark, and a guide to avoid the invalid conclusions being drawn,” the statement read.
The ministry also defended the Federal Government’s borrowing programme, insisting that all loans obtained by the current administration were lawful and duly approved.
It maintained that every naira borrowed fell within the limits authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
According to the statement, government borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, while details of the country’s debt obligations were regularly published by the Debt Management Office.
FG disputes World Bank’s N7.7tn interest payments
