The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt position, rejecting concerns that the country’s ₦7.7 trillion interest payments in the first half of 2026 pose a threat to debt sustainability.
The Federal Ministry of Finance described the assessment as misleading, arguing that it failed to account for certain government revenues and included debt obligations the Federal Government services on behalf of state governments.
The disagreement followed the World Bank’s October 2026 Nigeria Development Update, which reported that interest payments between January and June 2026 amounted to 124 per cent of the Federal Government’s revenue.
According to the figures, the government generated ₦6.2 trillion in revenue during the period but spent ₦7.7 trillion on interest payments, leaving a gap of ₦1.5 trillion.
FG explains its position
In a statement issued on Sunday and shared by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the ministry gave three reasons for disputing the interpretation of the figures.
First, it argued that the interest payments included obligations on external loans obtained by states but serviced by the Federal Government. It maintained that comparing such payments against federal revenue alone overstated the burden.
Second, the ministry said the reported revenue excluded income already earned by government agencies and enterprises but not yet remitted to the Treasury.
Third, it argued that some tax revenues are collected predominantly in the second half of the year, making a six-month assessment insufficient to determine the government’s full-year fiscal position.
Government cites rising revenue
The ministry said Federal Government revenue increased by 72 per cent, rising from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026.
Interest payments, however, rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.
According to the ministry, the interest-to-revenue ratio consequently declined from 156 per cent in the first half of 2025 to approximately 124 per cent in the first half of 2026.
It described the improvement as evidence that the administration’s economic reforms were yielding results, adding that the gap between interest payments and revenue had narrowed from ₦2 trillion to ₦1.5 trillion.
FG defends borrowing strategy
The ministry also rejected the use of a six-month snapshot as a definitive measure of Nigeria’s debt sustainability.
It cited the World Bank’s projection that Nigeria’s full-year 2026 debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue.
The government further maintained that its borrowing programme remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It said all borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
Despite the government’s defence, the reported figures show that interest payments exceeded recorded federal revenue during the first half of the year. The disagreement centres on how the figures should be interpreted and whether they adequately reflect the government’s overall fiscal position.
