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% of revenue in the first half of 2026. This conclusion is misleading, for three reasons.
1. ๐๐ญ ๐๐จ๐ฆ๐ฉ๐๐ซ๐๐ฌ ๐ฆ๐ข๐ฌ๐ฆ๐๐ญ๐๐ก๐๐ ๐๐ข๐ ๐ฎ๐ซ๐๐ฌ ๐๐ ๐๐ข๐ง๐ฌ๐ญ ๐๐ง ๐ข๐ง๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐ ๐ซ๐๐ฏ๐๐ง๐ฎ๐ ๐๐๐ฌ๐.
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 reported revenue is also incomplete. It excludes independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury. In addition, more revenue is typically earned in the second half of the year than in the first due to the statutory timing of certain tax payments. 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.
2. ๐๐ฏ๐๐ง ๐จ๐ง ๐ญ๐ก๐ ๐ฌ๐๐ฆ๐ ๐๐๐ฅ๐๐ฎ๐ฅ๐๐ญ๐ข๐จ๐ง, ๐ญ๐ก๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐ข๐ฆ๐ฉ๐ซ๐จ๐ฏ๐๐ ๐ฌ๐ข๐ ๐ง๐ข๐๐ข๐๐๐ง๐ญ๐ฅ๐ฒ.
Between the first half of 2025 and the first half of 2026, federal revenue rose by 72%, from โฆ3.6 trillion to โฆ6.2 trillion. Interest payments rose by a much slower 38%, from โฆ5.6 trillion to โฆ7.7 trillion. Revenue is therefore growing almost twice as fast as interest costs. As a result, the interest-to-revenue ratio fell by 32 percentage points in a single year, from 156% to 124%, and the gap between interest and revenue narrowed from โฆ2.0 trillion to โฆ1.5 trillion. This is the result of reforms working, not a sign of fiscal distress.
3. ๐ ๐ก๐๐ฅ๐-๐ฒ๐๐๐ซ ๐ฌ๐ง๐๐ฉ๐ฌ๐ก๐จ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐ฆ๐๐๐ฌ๐ฎ๐ซ๐ ๐จ๐ ๐๐๐๐ญ ๐ฌ๐ฎ๐ฌ๐ญ๐๐ข๐ง๐๐๐ข๐ฅ๐ข๐ญ๐ฒ.
Debt sustainability is assessed on a full-year basis, not over six months. The same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46% of revenue. This is the appropriate benchmark, and a guide to avoid the invalid conclusions being drawn.
๐๐ฅ๐ฅ ๐๐จ๐ซ๐ซ๐จ๐ฐ๐ข๐ง๐ ๐ข๐ฌ ๐ฅ๐๐ฐ๐๐ฎ๐ฅ ๐๐ง๐ ๐๐ฉ๐ฉ๐ซ๐จ๐ฏ๐๐.
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. 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 welcomes informed scrutiny of public finances. We encourage analysts and commentators to apply the same rigour they seek to hold the government to: compare like with like, read figures in context, and seek clarification where the data is unclear.
