FG rejects World Bank’s warning over ₦7.7tn debt interest payments
The Federal Government has rejected concerns raised by the World Bank over Nigeria’s debt sustainability, describing claims that interest payments consumed 124% of government revenue in the first half of 2026 as misleading.
In a statement issued on Sunday and shared by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the Federal Ministry of Finance insisted that Nigeria’s fiscal position was improving, with revenue growing faster than debt servicing costs.
The World Bank, in its October 2026 Nigeria Development Update, reported that interest payments reached ₦7.7tn in the first six months of the year, equivalent to 124% of Federal Government revenue.
However, the ministry argued that the calculation failed to account for revenue earned but not yet remitted by government agencies and debt obligations serviced by the Federal Government on behalf of states.
“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states,” the ministry said.
“Measuring this against federal revenue alone overstates the ratio, which is only meaningful when debt and revenue cover the same level of government.”
It explained that statutory tax payment schedules also meant government revenue was typically higher in the second half of the year, making six-month figures an unreliable measure of annual debt sustainability.
According to the ministry, federal revenue increased by 72%, from ₦3.6tn in the first half of 2025 to ₦6.2tn during the corresponding period in 2026.
Interest payments, meanwhile, rose by 38%, from ₦5.6tn to ₦7.7tn.
The ministry said the improvement reduced the interest-to-revenue ratio from 156% to 124%, while the gap between interest payments and revenue narrowed from ₦2tn to ₦1.5tn.
“This is the result of reforms working, not a sign of fiscal distress,” it stated.
The government further maintained that the World Bank itself projected Nigeria’s full-year 2026 debt service, covering both principal and interest, at 46% of revenue.
It argued that the annual projection provided a more appropriate basis for assessing fiscal sustainability than first-half figures.
The ministry also defended the administration’s borrowing programme, insisting that all loans complied with the 2026 Appropriation Act, the Fiscal Responsibility Act 2007 and relevant debt management legislation.
It welcomed public scrutiny of government finances but urged analysts to examine fiscal data within the appropriate context.