morganable politics/Governance
The controversy followed reports indicating that the Federal Government spent N7.7tn on interest payments between January and June 2026, compared with revenue of N6.2tn.
KaNo—
The Federal Government has rejected concerns over Nigeria’s rising debt obligations following a World Bank report indicating that interest payments reached N7.7tn in the first half of 2026, exceeding the N6.2tn revenue recorded during the same period.
The government described claims that interest payments accounted for 124 per cent of federal revenue as misleading, insisting that the calculation failed to reflect the country’s actual fiscal position and improvements recorded under the current administration.
The Federal Ministry of Finance made this known in a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
According to the ministry, the interpretation of figures contained in the World Bank’s October 2026 Nigeria Development Update overlooked important components of government revenue and debt obligations.
The ministry maintained that Nigeria’s fiscal performance had improved considerably, with revenue increasing faster than interest payments.
“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 read.
The controversy followed reports indicating that the Federal Government spent N7.7tn on interest payments between January and June 2026, compared with revenue of N6.2tn.
A comparison of both figures showed that interest payments exceeded revenue by N1.5tn, representing approximately 124.2 per cent of government earnings during the period.
However, the ministry challenged the interpretation, explaining that the interest payments included obligations serviced by the Federal Government on behalf of other tiers of government.
It argued that comparing such payments with revenue belonging exclusively to the Federal Government created an inaccurate picture of the country’s debt burden.
“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,” the ministry stated.
The government further explained that the revenue figures used in the calculation excluded income generated by government-owned enterprises and agencies that had not been remitted to the Treasury.
It added that the timing of statutory tax payments meant that certain revenue collections were concentrated in the second half of the year.
Consequently, the ministry argued that using revenue recorded within the first six months to assess the country’s annual debt sustainability could produce misleading conclusions.
Providing a comparison with the previous year, the ministry disclosed that the interest-to-revenue ratio declined from 156 per cent in the first half of 2025 to approximately 124 per cent in the corresponding period of 2026.
It attributed the improvement to ongoing fiscal reforms and increased government revenue.
According to the ministry, federal revenue rose by 72 per cent, from N3.6tn in the first half of 2025 to N6.2tn during the same period in 2026.
Interest payments, however, increased by 38 per cent, rising from N5.6tn to N7.7tn.
The ministry explained that the development represented a reduction of approximately 32 percentage points in the interest-to-revenue ratio.
It also noted that the difference between interest obligations and revenue narrowed from N2tn in the first half of 2025 to N1.5tn in 2026.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry declared.
The government further maintained that the full-year debt-service-to-revenue ratio had declined below 60 per cent, compared with 97 per cent before the introduction of the current administration’s economic reforms.
It insisted that the improvement demonstrated progress in strengthening public finances and managing debt obligations.
The ministry also cited projections contained in the same World Bank report, which estimated Nigeria’s full-year debt service, including principal and interest payments, at 46 per cent of government revenue in 2026.
“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 added.
Beyond the controversy surrounding interest payments, the ministry defended the Federal Government’s borrowing programme, maintaining that all loans obtained under the current administration followed established legal procedures.
It explained that government borrowing remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the authorised borrowing plan.
The ministry added that the borrowing programme complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
It further stated that information concerning Nigeria’s debt obligations was regularly published by the Debt Management Office to promote transparency and public accountability.
Despite disputing the interpretation of the World Bank figures, however, the ministry did not provide revised revenue or interest-payment figures to establish an alternative ratio for the first half of 2026.
Meanwhile, details of another World Bank financing arrangement showed that Nigeria would begin repaying the principal on a $1.25bn loan in December 2031.
The financing agreements indicated that the final repayment on one of the facilities would fall due in June 2060.
The loan, approved under the Nigeria Actions for Investment and Jobs Acceleration Development Policy Financing programme, is designed to support economic reforms, improve electricity supply, expand access to credit and strengthen trade competitiveness.
The World Bank approved the facility in July 2026 amid concerns over Nigeria’s growing external debt obligations.
The financing programme also seeks to deepen capital markets, strengthen the digital economy, improve agricultural productivity and support domestic revenue mobilisation.
Other components include accelerating electrification, reducing trade barriers and improving access to quality agricultural seeds.
The $1.25bn facility represents the second-largest single World Bank loan secured under President Bola Tinubu, following the $1.5bn Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
