The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt burden, insisting that the N7.7tn spent on interest payments in the first half of 2026 does not accurately reflect the country’s overall fiscal position.
The Federal Ministry of Finance said the reported interest-to-revenue ratio of 124 per cent was misleading because it compared debt obligations covering different levels of government with revenue attributed only to the Federal Government.
It also argued that the figures did not capture all government earnings and failed to account for the seasonal pattern of revenue collection.
The ministry 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.
It maintained that the country’s fiscal position had improved under the current administration, 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 said.
The dispute followed the World Bank’s October 2026 Nigeria Development Update, which put Federal Government revenue at N6.2tn and interest payments at N7.7tn between January and June 2026.
A calculation based on the published figures puts interest payments at approximately 124.2 per cent of revenue, leaving a gap of N1.5tn.
The ministry, however, questioned the basis of the comparison, arguing that the figures did not provide a complete picture of the government’s financial position.
According to the ministry, the interest payments included obligations on external loans taken by state governments but serviced by the Federal Government.
It said comparing such payments with federal revenue alone could produce a distorted picture of the actual 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.
It also argued that the revenue figure did not include income generated by some government agencies and enterprises that had yet to be remitted to the Treasury.
The ministry further noted that statutory payment schedules meant some taxes were collected mainly in the second half of the year.
It said these factors made the first six months of the year an incomplete basis for drawing conclusions about the government’s annual debt position.
The ministry compared the first-half figures for 2025 and 2026 to support its argument that the situation was improving.
It said the interest-to-revenue ratio fell from 156 per cent in the first half of 2025 to approximately 124 per cent in the corresponding period of 2026.
Federal Government revenue, according to the statement, increased by 72 per cent, from N3.6tn in the first half of 2025 to N6.2tn in the first half of 2026.
Interest payments rose by 38 per cent, from N5.6tn to N7.7tn over the same period.
The ministry said the difference between revenue and interest payments consequently narrowed from N2tn to N1.5tn, while the interest-to-revenue ratio declined by about 32 percentage points.
“This is the result of reforms working, not a sign of fiscal distress,” it declared.
It also disputed the use of a six-month fiscal report as a conclusive measure of Nigeria’s debt sustainability, arguing that annual figures offered a more appropriate basis for assessing the country’s capacity to meet its obligations.
“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 read.
The ministry further defended the administration’s borrowing programme, saying all loans obtained by the current government were lawful and had received the necessary approvals.
It maintained that borrowing remained within the limits authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It also cited the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003 as part of the legal framework governing public borrowing.
The ministry said the Debt Management Office regularly published details of Nigeria’s debt obligations.
However, the ministry did not provide revised figures for revenue and interest payments or publish an alternative ratio to support its challenge to the World Bank’s calculation.
