The Federal Ministry of Finance has dismissed reports that Federal Government interest payments reached 124 per cent of revenue in the first half of 2026, describing the conclusion as misleading.
The Ministry was reacting to recent analysis and public commentary citing the World Bank’s October 2026 Nigeria Development Update, which claimed that interest payments hit 124 per cent of revenue in H1 2026.
According to the Ministry, the conclusion is misleading for three reasons, chief among which is that it compares mismatched figures against an incomplete revenue base.
It explained that the interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states, and measuring this against federal revenue alone overstates the ratio.
The Ministry also noted that the reported revenue is incomplete, as it excludes independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury, adding that more revenue is typically earned in the second half of the year due to statutory timing of certain tax payments.
It recalled that the ratio stood at 156 per cent in H1 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60 per cent, down from 97 per cent before the reforms, describing it as a clear sign of progress delivered by the administration’s reforms.
The Ministry further argued that even on the same calculation, the position has improved significantly, noting that between H1 2025 and H1 2026, federal revenue rose by 72 per cent from N3.6 trillion to N6.2 trillion, while interest payments rose by a slower 38 per cent from N5.6 trillion to N7.7 trillion.
It stated that revenue is therefore growing almost twice as fast as interest costs, causing the interest-to-revenue ratio to fall by 32 percentage points in a single year from 156 per cent to 124 per cent, with the gap between interest and revenue narrowing from N2.0 trillion to N1.5 trillion.
On debt sustainability, the Ministry said a half-year snapshot is not a measure, noting that sustainability is assessed on a full-year basis and that the same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46 per cent of revenue.
The Ministry added that every naira borrowed by the Federal Government falls within limits approved by the National Assembly under the 2026 Appropriation Act and borrowing plan, in full compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office Act 2003, while welcoming informed scrutiny of public finances.
