The Federal Ministry of Finance has disputed reports that the Federal Government spent 124 per cent of its revenue on interest payments in the first half of 2026, describing the figure as misleading because of differences in the scope and timing of revenue and debt-service calculations.
The ministry, in a statement issued in Abuja on Sunday, said the figure, attributed to the World Bank’s October 2026 Nigeria Development Update, did not provide a complete picture of the government’s fiscal position.
It argued that the calculation compared interest payments covering multiple tiers of government with federal revenue alone, while also excluding some government earnings yet to be remitted to the Treasury.
According to the ministry, the figure also failed to account for the seasonal pattern of revenue collection, noting that certain tax payments typically generate higher receipts in the second half of the year.
The ministry cited 2025 figures to support its position, 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.
It said the ratio had declined from 97 per cent before the current administration’s reforms, arguing that the figures demonstrated improvements in revenue mobilisation and debt management.
The ministry also highlighted growth in government revenue between the first halves of 2025 and 2026.
It said federal revenue increased by 72 per cent, from N3.6 trillion to N6.2 trillion, within the period, while interest payments rose by 38 per cent, from N5.6 trillion to N7.7 trillion.
According to the ministry, the difference in growth rates reduced the interest-to-revenue ratio by 32 percentage points, from 156 per cent to 124 per cent.
It added that the gap between interest payments and revenue narrowed from N2 trillion in the first half of 2025 to N1.5 trillion in the corresponding period of 2026.
The ministry maintained that the figures reflected revenue growth outpacing the increase in interest costs, rather than evidence of worsening fiscal conditions.
It further argued that a six-month snapshot was insufficient to determine the sustainability of the country’s debt, insisting that a full-year assessment provided a more appropriate basis for evaluating the government’s capacity to meet its obligations.
Citing the same World Bank report, the ministry said Nigeria’s debt service for the full year of 2026, covering both interest and principal repayments, was projected at 46 per cent of revenue.
It described the projected full-year ratio as a more appropriate benchmark for assessing the country’s debt position.
The ministry also defended the legality of federal borrowing, stating that all loans contracted by the government fell within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It said the borrowing process complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, adding that borrowing information was regularly published by the Debt Management Office.
While welcoming public scrutiny of government finances, the ministry urged analysts and commentators to ensure that figures were compared on a consistent basis and interpreted within the appropriate fiscal context.
It also encouraged stakeholders to seek clarification where data appeared unclear, stressing the need for rigorous analysis of public finance figures.
Read the full statement below:
𝐅𝐄𝐃𝐄𝐑𝐀𝐋 𝐌𝐈𝐍𝐈𝐒𝐓𝐑𝐘 𝐎𝐅 𝐅𝐈𝐍𝐀𝐍𝐂𝐄
𝐏𝐑𝐄𝐒𝐒 𝐑𝐄𝐋𝐄𝐀𝐒𝐄
Interest payment on loans 60 % of revenue not 124 %: Setting the record straight
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. 𝐈𝐭 𝐜𝐨𝐦𝐩𝐚𝐫𝐞𝐬 𝐦𝐢𝐬𝐦𝐚𝐭𝐜𝐡𝐞𝐝 𝐟𝐢𝐠𝐮𝐫𝐞𝐬 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐚𝐧 𝐢𝐧𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 𝐛𝐚𝐬𝐞.
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. 𝐄𝐯𝐞𝐧 𝐨𝐧 𝐭𝐡𝐞 𝐬𝐚𝐦𝐞 𝐜𝐚𝐥𝐜𝐮𝐥𝐚𝐭𝐢𝐨𝐧, 𝐭𝐡𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐢𝐦𝐩𝐫𝐨𝐯𝐞𝐝 𝐬𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐭𝐥𝐲.
Between the first half of 2025 and the first half of 2026, federal revenue rose by 72%, from ₦3.6 trillion to ₦6.2 trillion. Interest payments rose by a much slower 38%, from ₦5.6 trillion to ₦7.7 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 ₦2.0 trillion to ₦1.5 trillion. This is the result of reforms working, not a sign of fiscal distress.
3. 𝐀 𝐡𝐚𝐥𝐟-𝐲𝐞𝐚𝐫 𝐬𝐧𝐚𝐩𝐬𝐡𝐨𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐚 𝐦𝐞𝐚𝐬𝐮𝐫𝐞 𝐨𝐟 𝐝𝐞𝐛𝐭 𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲.
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.
𝐀𝐥𝐥 𝐛𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐢𝐬 𝐥𝐚𝐰𝐟𝐮𝐥 𝐚𝐧𝐝 𝐚𝐩𝐩𝐫𝐨𝐯𝐞𝐝.
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.
𝐒𝐢𝐠𝐧𝐞𝐝:
𝘍𝘦𝘥𝘦𝘳𝘢𝘭 𝘔𝘪𝘯𝘪𝘴𝘵𝘳𝘺 𝘰𝘧 𝘍𝘪𝘯𝘢𝘯𝘤𝘦
𝘏𝘦𝘢𝘥𝘲𝘶𝘢𝘳𝘵𝘦𝘳s
Abuja, 18 October 2026