The Federal Government has rejected concerns raised by the World Bank that ₦7.7tn in interest payments during the first half of 2026 threatens Nigeria’s debt sustainability.
The position was outlined in an official statement issued on Sunday and shared via X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
In its latest Nigeria Development Update (NDU), the World Bank expressed concern over the country’s debt servicing-to-revenue ratio for the first half of 2026, putting it at 124 percent.
In response, the Federal Ministry of Finance insisted that Nigeria’s fiscal stance has improved, with revenue expanding faster than interest obligations. The ministry labeled assertions that interest costs consumed 124 percent of government revenue in the first half of the year as misleading. It argued that such calculations rely on incomplete revenue data and improperly incorporate debt serviced on behalf of state governments.
The ministry further noted that the figure ignored independent revenues collected by government entities and agencies that had not yet been transferred to the Treasury. Additionally, it explained that statutory payment schedules lead to higher tax collections in the second half of the year, making first-half figures an inaccurate baseline for evaluating annual debt commitments.
The Federal Ministry of Finance stated:
“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 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.
“The reported revenue is also incomplete. It excludes independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury.
“In addition, more revenue is typically earned in the second half of the year than in the first due to the statutory timing of certain tax payments. This is why the ratio stood at 156% in H1 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60%, down from 97% before the reforms.
“This is a clear sign of the progress delivered by the current administration’s reforms.
“Between the first half of 2025 and the first half of 2026, federal revenue rose by 72%, from ₦3.6 trillion to ₦6.2 trillion. Interest payments rose by a much slower 38%, from ₦5.6 trillion to ₦7.7 trillion.
“Revenue is therefore growing almost twice as fast as interest costs. As a result, the interest-to-revenue ratio fell by 32 percentage points in a single year, from 156% to 124%, and the gap between interest and revenue narrowed from ₦2.0 trillion to ₦1.5 trillion. This is the result of reforms working, not a sign of fiscal distress.
“Debt sustainability is assessed on a full-year basis, not over six months. The same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46% of revenue.
“This is the appropriate benchmark, and a guide to avoid the invalid conclusions being drawn.
“Every naira borrowed by the Federal Government falls within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
“All borrowing is conducted in full compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, and is published regularly by the Debt Management Office.
“The Ministry welcomes informed scrutiny of public finances. We encourage analysts and commentators to apply the same rigour they seek to hold the government to: compare like with like, read figures in context, and seek clarification where the data is unclear.”
