By Ayomide Otitoju
The Federal Government has disputed the World Bank’s assessment that Nigeria’s ₦7.7 trillion interest payments in the first half of 2026 pose a threat to the country’s debt sustainability.
The Federal Ministry of Finance stated its position in a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The response followed the World Bank’s October 2026 Nigeria Development Update, which raised concerns over Nigeria’s debt-servicing-to-revenue ratio, estimated at 124 per cent in the first half of the year.
However, the ministry described reports that interest payments consumed 124 per cent of Federal Government revenue during the period as misleading, arguing that the calculation relied on incomplete revenue figures and included debt obligations serviced on behalf of state governments.
According to the ministry, the interest payment figure includes external loans serviced by the Federal Government for other tiers of government, while the revenue calculation excludes income earned by government agencies and enterprises but not yet remitted to the Treasury.
It also noted that statutory tax payment schedules mean revenue collections are typically higher in the second half of the year, making first-half figures an incomplete basis for assessing annual debt obligations.
The ministry cited the 2025 figures, saying the interest-to-revenue ratio stood at 156 per cent in the first half of that year, while the full-year debt-service-to-revenue ratio fell below 60 per cent, compared with 97 per cent before the current administration’s reforms.
It said the comparison demonstrated the impact of the government’s fiscal reforms.
The ministry further disclosed that Federal Government revenue increased by 72 per cent, 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 over the same period.
According to the ministry, the faster growth in revenue reduced the interest-to-revenue ratio by 32 percentage points, from 156 per cent to 124 per cent, while narrowing the gap between interest payments and revenue from ₦2 trillion to ₦1.5 trillion.
“Revenue is therefore growing almost twice as fast as interest costs,” the ministry stated, describing the figures as evidence of fiscal reforms rather than a sign of distress.
It added that debt sustainability should be assessed using full-year figures rather than six-month data.
The ministry also 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.
On borrowing, the ministry said all Federal Government loans fall within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It added that borrowing activities comply with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, with details published regularly by the Debt Management Office.
The ministry said it welcomed scrutiny of public finances but urged analysts and commentators to compare figures on a consistent basis, consider the context and seek clarification where necessary.
The disagreement highlights differing interpretations of Nigeria’s debt burden, particularly the choice of revenue measures and the period used to assess debt-servicing pressures.
