FG Reacts To 124% Interest Payment Claim By World Bank
The Federal Ministry of Finance has dismissed claims that Federal Government interest payments reached 124% of revenue in the first half of 2026.
The claim was attributed to the World Bank’s October 2026 Nigeria Development Update.
In a statement, the Ministry said the conclusion is misleading for three reasons.
1. Mismatched figures against incomplete revenue base
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 said measuring this against federal revenue alone overstates the ratio.
It added that the reported revenue is also incomplete, as it excludes independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury.
The Ministry noted that more revenue is typically earned in the second half of the year due to the statutory timing of certain tax payments, explaining 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.
2. Position has improved significantly
The Ministry said between H1 2025 and H1 2026, federal revenue rose by 72%, from N3.6 trillion to N6.2 trillion, while interest payments rose by 38%, from N5.6 trillion to N7.7 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 N2.0 trillion to N1.5 trillion,” it said.
3. Half-year snapshot not a measure of debt sustainability
The Ministry stated that debt sustainability is assessed on a full-year basis, not over six months.
It added that the same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46% of revenue.
All borrowing lawful and approved
The Ministry said 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.
It added that 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,” the statement added.