The Federal Ministry of Finance has disputed claims that federal interest payments consumed 124 per cent of revenue in the first half of 2026, arguing that the calculation combines debt obligations across different tiers of government with an incomplete federal revenue figure.
In a statement on Sunday, October 18, the ministry said the interpretation of figures in the World Bank’s October 2026 Nigeria Development Update was misleading. BuyMaps
The report recorded interest payments of ₦7.7 trillion against federal revenue of ₦6.2 trillion during the period. According to the ministry, the interest figure includes payments made by the Federal Government on behalf of other tiers of government, including external loans owed 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 said. The ministry also argued that the revenue figure excluded income already earned by government agencies and enterprises but not yet remitted to the Treasury.
It said the timing of statutory tax payments meant revenue collections were typically higher in the second half of the year. “This is why the ratio stood at 156% in H1 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60%, down from 97% before the reforms. This is a clear sign of the progress delivered by the current administration’s reforms,” the statement said.
The ministry maintained that even using the same half-year calculation, revenue growth had outpaced the increase in interest costs. “Between the first half of 2025 and the first half of 2026, federal revenue rose by 72%, from ₦3.6 trillion to ₦6.2 trillion. Interest payments rose by a much slower 38%, from ₦5.6 trillion to ₦7.7 trillion,” it said.
It noted that the interest-to-revenue ratio consequently declined by 32 percentage points, from 156 per cent to 124 per cent, while the gap between interest payments and revenue narrowed from ₦2 trillion to ₦1.5 trillion. “This is the result of reforms working, not a sign of fiscal distress,” the ministry said. It argued that debt sustainability should be assessed over a full year rather than through a six-month snapshot.
According to the ministry, the same World Bank report projects full-year 2026 debt service, including principal and interest, at 46 per cent of revenue. It described that projection as the appropriate benchmark for assessing the position. The ministry also defended the legality of federal borrowing. “Every naira borrowed by the Federal Government falls within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan,” it said.
“All borrowing is conducted in full compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, and is published regularly by the Debt Management Office.” The ministry welcomed scrutiny of public finances but urged analysts and commentators to “compare like with like, read figures in context, and seek clarification where the data is unclear”.