SUN OCT 18 2026-theGBJournal| Nigeria’s finance ministry has defended the government’s debt position after analysis citing World Bank data showed federal government interest payments reached 124% of revenue in the first half of 2026, arguing that the figure excludes some government income and compares debt obligations across different tiers of government with federal revenue alone.
The Federal Ministry of Finance said the interpretation of the figures in the World Bank’s October 2026 Nigeria Development Update was misleading, adding that federal revenue had grown faster than interest payments over the past year.
The ministry’s response comes as scrutiny of Nigeria’s debt-servicing burden focuses on the government’s ability to generate sufficient revenue to meet its obligations.
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, while interest payments increased by 38%, from ₦5.6 trillion to ₦7.7 trillion, the ministry said.
It said the interest-to-revenue ratio fell by 32 percentage points over the period, from 156% to 124%, while the gap between interest payments and revenue narrowed from ₦2 trillion to ₦1.5 trillion.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry said.
However, the figures cited by the ministry show that interest payments still exceeded federal revenue by ₦1.5 trillion in the first half of 2026.
The ministry argued that a half-year comparison did not provide a complete picture of Nigeria’s debt sustainability, saying revenue collection typically increases in the second half of the year because of the statutory timing of certain tax payments.
It said the interest-to-revenue ratio stood at 156% in the first half of 2025, while the full-year debt-service-to-revenue ratio for that year was below 60%, compared with 97% before the reforms.
It described this as evidence of progress under the current administration’s reforms.
The finance ministry said the interest-payment figure included debt serviced by the federal government on behalf of other tiers of government, including external loans to states.
Comparing those obligations with federal revenue alone overstated the ratio, it said, arguing that a meaningful assessment required debt and revenue figures covering the same level of government.
It also said the revenue figure used in the comparison excluded independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury.
The ministry did not provide a revised first-half interest-to-revenue ratio in its statement that incorporates the additional revenue it cited.
The ministry said the World Bank’s report projected Nigeria’s full-year 2026 debt service, covering both interest and principal repayments, at 46% of revenue.
“Debt sustainability is assessed on a full-year basis, not over six months,” it said.
The ministry described the full-year projection as the appropriate benchmark for assessing the country’s debt position and warned against drawing conclusions from a six-month snapshot.
The 46% projection covers total debt service, including principal repayments, while the 124% figure cited in the first-half debate concerns interest payments.
The two measures therefore cover different obligations and periods.
The ministry also rejected concerns about the legality of federal borrowing, saying every naira borrowed fell within 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,” it said.
The ministry said it welcomed scrutiny of public finances but urged analysts and commentators to compare like with like, interpret figures in context and seek clarification where data was unclear.
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