The Federal Government of Nigeria has flawed the revenue figures contained in the latest World Bank’s Nigeria Development Update, dismissing concerns raised by the development finance institution that rising interest payments, if unchecked, could threaten the nation’s debt sustainability.
The Federal Ministry of Finance in a statement issued on Sunday representing the government’s position on the current fiscal and monetary reform policies, described the bank’s reports that interest payments consumed 124 per cent of the FG’s revenue in the first half of 2026 as outrightly misleading, noting that the calculation relied on incomplete revenue figures and also failed to capture debt obligations by the Federal Government serviced on behalf of state governments.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who shared the statement on via his X handle, maintained that Nigeria’s fiscal position had significantly improved, with government revenue growing faster than interest payments.
The minister clarified: “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.”
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In its recently published October 2026 Nigeria Development Update, the World Bank reported that the Federal Government’s revenue stood at N6.2 trillion and that Nigeria’s interest payments on debt surged to N7.7 trillion in the first half of 2026.
However, the ministry clarified that the bank’s calculation compared obligations covering multiple tiers of government with revenue attributed solely to the Federal Government.
According to the ministry, the interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states.
It pointed out that measuring this against federal revenue alone overstated the ratio, which is only meaningful when debt and revenue cover the same level of government.
This is even as the ministry maintained that the World Bank’s reported revenue excluded income already earned by government agencies and enterprises but not yet remitted to the Treasury, adding that statutory payment schedules meant certain taxes were collected predominantly in the second half of the year, making first-half revenue an incomplete basis for assessing annual debt obligations.
It stated that the interest-to-revenue ratio stood at 156 per cent in the first half of 2025, whereas the full-year debt-service-to-revenue ratio was below 60 per cent, compared with 97 per cent before the current administration’s reforms, describing the decline as evidence of progress in fiscal management.
Expatiating further on the revenue-debt position of the Federal Government, the ministry disclosed that federal revenue increased 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 rose by 38 per cent from N5.6tn to N7.7tn.
It maintained that the interest-to-revenue ratio declined by approximately 32 percentage points, from 156 per cent to 124 per cent, while the gap between interest payments and revenue narrowed from N2tn to N1.5tn, describing it as “the result of reforms working, not a sign of fiscal distress.
“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 ministry added.
As expected, the ministry also justified the Federal Government’s borrowing programme based on the legality of the borrowed loans, stressing that every naira borrowed fell within the limits authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
Similarly, the ministry stated that the federal and state governments’ borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
