FG tackles World Bank over revenue figures, dismisses debt concerns

The federal government has dismissed reports alleging that it spent 124 percent of its revenue on interest payments in the first half of 2026, describing the claim as misleading and mathematically flawed.

In a statement issued Sunday, the Federal Ministry of Finance clarified that recent commentary drawn from the World Bank’s October 2026 Nigeria Development Update misconstrues the country’s fiscal trajectory.

This followed reports based on the World Bank’s October 2026 Nigeria Development Update, which disclosed that the government’s revenue stood at N6.2 trillion in the first half of 2026, while interest payments reached N7.7 trillion.

Debunking the report, the statement said: “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 ministry explained that the analysis unfairly compares federal revenue against total debt service, which includes external obligations paid on behalf of state governments.

“Measuring that bill against federal revenue alone overstates the ratio, which is only meaningful when debt and revenue cover the same level of government,” the ministry stated.

The statement further noted that first-half revenue figures exclude income earned by government agencies not yet remitted to the treasury, adding that revenue collection traditionally spikes in the second half of the year due to statutory tax cycles.

Highlighting fiscal progress driven by ongoing economic reforms, the ministry pointed out that federal revenue grew by 72 percent, rising from N3.6 trillion in H1 2025 to N6.2 trillion in H1 2026. 

“In contrast, interest payments grew at a slower pace of 38 percent, moving from N5.6 trillion to N7.7 trillion. Consequently the interest-to-revenue ratio dropped by 32 percentage points year-on-year, while the deficit gap narrowed from N2.0 trillion to N1.5 trillion.

“This is the result of reforms working, not a sign of fiscal distress,” the statement asserted, noting that full-year 2026 debt service is projected at 46 percent of revenue. “Debt sustainability is assessed on a full-year basis, not over six months,” the statement added.

Reassuring Nigerians on fiscal compliance, the government maintained that all borrowing falls within limits approved by the National Assembly under the 2026 Appropriation Act, adhering strictly to the Fiscal Responsibility Act 2007 and the Debt Management Office Act 2003.

“We encourage commentators to compare like with like, read figures in context, and seek clarification where data is unclear,” the ministry said. 

 “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 further argued.

The ministry also said 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. 

While describing the reduction as evidence of progress in fiscal management, it noted that the 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 ministry said 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,” it said.

On the use of a six-month fiscal snapshot as a definitive measure of debt sustainability, it said “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.

…Nigeria targets 7% above growth

In a related development, Nigeria is targeting annual economic growth of seven per cent, above the International Monetary Fund’s (IMF) projections, as the federal government intensifies efforts to reform the tax system, reduce inflation and improve the business environment.

Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele disclosed this at the 2026 IMF-World Bank Meetings in Bangkok, Thailand, where he described the government’s “Nigeria Rising” narrative as a reflection of ongoing economic reforms.

Oyedele said the initiative was designed to communicate changes taking place in Nigeria challenging international perceptions that, in the government’s view, do not fully reflect the country’s economic progress.

Speaking at the closing press briefing, the minister said he observed growing interest in Nigeria among international stakeholders, which he attributed to the government’s reform programme.

He identified the overhaul of the country’s tax system as a major component of the reforms, noting that the government had rewritten Nigeria’s tax framework within two years.

According to him, the combined impact of tax changes and broader economic measures could place the country on a path towards sustainable growth and shared prosperity.

“If you put all of this together, it means one thing: that we are on the path to a celebrated growth that is sustainable, and ultimately to deliver shared prosperity to our people,” he said.

Oyedele urged Nigerians to pay attention to emerging economic opportunities, saying, “Everywhere you look, there’s an opportunity. But you need to look for the opportunity.”

 …Targeting growth above IMF forecasts

The minister said the government was working towards seven per cent economic growth, significantly higher than the IMF’s projections for Nigeria over the next two years.

 “We expect growth that is much higher than what the IMF is projecting for Nigeria. Our target is to get to 7 per cent growth rates,” he said.

He attributed the growth ambition to planned interventions addressing structural constraints, inflation and the cost of doing business.

However, he said, achieving the target would require a substantial acceleration in economic activity, supported by stronger investment, productivity and business expansion.

Oyedele identified food, energy and logistic costs as major sources of inflationary pressure, saying efforts to address them would help reduce inflation and borrowing costs.  

He argued that bringing inflation down to low single digits could create conditions for single-digit interest rates, improving access to credit for businesses and encouraging investment.

The minister highlighted the pressure of high lending rates on companies, noting that some businesses were recording growth of about 30 per cent while the wider economy expanded at a much slower pace.

“Imagine that prime lending is close to 30 per cent. Your top business is growing at 30 per cent and you are still growing at 4.5 per cent. Just imagine what is possible when they borrow at a single digit,” he said.

Oyedele pointed to improved performance in the foreign exchange market, saying it had helped strengthen the inflation outlook, although pressures from food, energy and logistics remained.