The Federal Government has faulted the revenue figures contained in the World Bank’s latest Nigeria Development Update, dismissing concerns that rising interest payments threaten the country’s debt sustainability.
The Federal Ministry of Finance described reports that interest payments consumed 124 per cent of the FG’s revenue in the first half of 2026 as misleading, arguing that the calculation relied on incomplete revenue figures and failed to account for debt obligations serviced on behalf of state governments.
The ministry made its position known in a statement on Sunday, which was shared by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, via his X handle.
According to the statement, Nigeria’s fiscal position had improved significantly, with government revenue growing faster than interest payments.
It stated, “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 clarification followed reports based on the World Bank’s October 2026 Nigeria Development Update, which disclosed that the FG’s revenue stood at N6.2 trillion in the first half of 2026, while interest payments reached N7.7 trillion.
An independent analysis of the figures by The PUNCH showed that interest payments represented approximately 124.2 per cent of revenue, exceeding government earnings by N1.5tn. The percentage was calculated from the World Bank’s published figures and was not expressly stated in its report.
However, the ministry argued that the calculation compared obligations covering multiple tiers of government with revenue attributed solely to the Federal Government.
“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to 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 claimed.
The ministry also maintained that the reported revenue excluded income already earned by government agencies and enterprises but not yet remitted to the Treasury.
It explained 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.
According to the ministry, 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.
It described the reduction as evidence of progress in fiscal management.
The ministry further highlighted 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.
Consequently, 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.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry declared.
It also rejected the use of a six-month fiscal snapshot as a definitive measure of debt sustainability, insisting that full-year projections provided a more appropriate assessment.
“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 statement read.
The ministry further defended the Federal Government’s borrowing programme, insisting that all loans were lawful and duly approved.
It maintained that every naira borrowed fell within the limits authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
According to the statement, government borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, while details of the country’s debt obligations were regularly published by the DMO.
However, despite faulting the World Bank’s revenue figures and questioning the basis of the debt-interest calculation, the ministry did not provide revised revenue and interest payment figures or an alternative ratio to substantiate the FG’s position.