The Federal Government has rejected the World Bank's finding that interest payments absorbed 124.19 percent of federal revenue in the first half of 2026, describing the ratio as an incomplete measure of its fiscal position.
In a statement issued on Sunday, October 18, the Federal Ministry of Finance said the computation, drawn from the World Bank's October 2026 Nigeria Development Update, compares federal interest costs against a revenue base that excludes some government income. The ministry explained that the interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states, while the revenue figure omits independent revenue earned by government agencies and enterprises that has not yet been remitted to the Treasury.
The ministry also pointed to the timing of collections. It argued that federal revenue is typically higher in the second half of the year because of the statutory schedule for certain tax payments, making a half-year comparison an unreliable test of debt sustainability.
It stated: “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.”
The ministry added that the ratio stood at 156 percent in the first half of 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60 percent, down from 97 percent before the reforms, calling this “a clear sign of the progress delivered by the current administration's reforms.”
According to the ministry, federal revenue rose 72 percent year on year to N6.2 trillion in the first half of 2026, from N3.6 trillion in the same period of 2025. Interest payments climbed 38 percent to N7.7 trillion from N5.6 trillion. The gap between interest costs and revenue narrowed to N1.5 trillion from N2 trillion. Revenue was growing almost twice as fast as interest costs, contributing to a 32 percentage point decline in the interest-to-revenue ratio.
In its Nigeria Development Update, titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities,” the World Bank said Nigeria's interest payments rose to N7.7 trillion in the first half of 2026 from N5.6 trillion a year earlier, consuming 124.19 percent of federal government revenue. The bank also said interest payments increased to 3.1 percent of gross domestic product from 2.5 percent.
