The Federal Government has disagreed with the World Bank’s assessment of Nigeria’s debt position, insisting that ₦7.7 trillion spent on interest payments in the first half of 2026 does not indicate that the country’s debt is becoming unsustainable.
The disagreement follows concerns raised by the World Bank in its latest Nigeria Development Update (NDU), which put Nigeria’s debt servicing-to-revenue ratio at 124 per cent for the first six months of 2026.
In a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the Federal Ministry of Finance described the reported ratio as misleading.
The ministry argued that the calculation relied on incomplete revenue figures and included debt obligations the Federal Government services on behalf of state governments.
According to the ministry, using federal revenue alone to assess debt obligations covering different levels of government gives an inaccurate picture of the country’s fiscal position.
“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 statement said.
The ministry explained that the interest payment figure includes debt serviced by the Federal Government on behalf of other tiers of government, including external loans obtained by states.
“Measuring this against federal revenue alone overstates the ratio which is only meaningful when debt and revenue cover the same level of government,” it added.
The ministry also said the revenue figure used in the calculation excluded income already earned by government agencies and enterprises but not yet remitted to the Treasury.
It further argued that the timing of statutory tax payments meant that government revenue was generally higher in the second half of the year, making first-half figures an incomplete basis for assessing annual debt obligations.
The ministry cited the 2025 figures as an example, saying the debt service-to-revenue ratio stood at 156 per cent in the first half of that year, while the full-year ratio fell below 60 per cent, compared with 97 per cent before the government’s reforms.
According to the ministry, this demonstrated the impact of the current administration’s fiscal reforms.
FG Says Revenue Is Growing Faster Than Interest Payments
The Federal Ministry of Finance said federal revenue increased by 72 per cent between the first halves of 2025 and 2026, rising from ₦3.6 trillion to ₦6.2 trillion.
Over the same period, interest payments rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.
“Revenue is therefore growing almost twice as fast as interest costs,” the ministry stated.
It added that the interest-to-revenue ratio had declined by 32 percentage points within one year, falling from 156 per cent to 124 per cent.
The gap between interest payments and revenue also narrowed from ₦2 trillion to ₦1.5 trillion, which the ministry described as evidence that its reforms were producing results rather than indicating fiscal distress.
The ministry further argued that debt sustainability should be assessed using full-year figures rather than data covering only six months.
It cited the World Bank’s projection that Nigeria’s total debt service for 2026, including both interest and principal repayments, would amount to 46 per cent of revenue.
“This is the appropriate benchmark, and a guide to avoid the invalid conclusions being drawn,” the statement said.
The ministry also maintained that all Federal Government borrowing remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It said borrowing activities were being conducted in accordance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
The government added that its borrowing activities were regularly published by the Debt Management Office.
While defending its fiscal position, the ministry said it welcomed informed scrutiny of public finances but urged analysts and commentators to assess figures in their proper context.
“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.
