The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt position, insisting that the reported interest payments of 124 per cent of federal revenue in the first half of 2026 do not accurately reflect the country’s overall fiscal situation.
The Federal Ministry of Finance argued that the calculation was misleading because it compared interest obligations covering different tiers of government with revenue attributed solely to the Federal Government.
The ministry stated its position in a statement issued on Sunday and shared by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on his X account.
The disagreement followed the World Bank’s October 2026 Nigeria Development Update,
which reported that the Federal Government generated N6.2 trillion in revenue in the first six months of the year, while interest payments amounted to N7.7 trillion.
Based on the figures, interest payments represented approximately 124.2 per cent of federal revenue, exceeding the government’s reported earnings by N1.5 trillion.
However, the Finance Ministry maintained that the figures did not provide a complete picture of the government’s debt obligations and revenue performance.
According to the ministry, the interest payments included debts serviced by the Federal Government on behalf of state governments, particularly external loans contracted by the states.
It argued that comparing such obligations with federal revenue alone overstated the debt burden, insisting that a meaningful assessment must compare revenue and debt servicing obligations attributable to the same level of government.
“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.
The ministry further explained that some revenues generated by government agencies and enterprises had yet to be transferred to the Treasury, while the timing of statutory tax payments could affect revenue figures recorded during the first half of the year.
It therefore argued that six-month figures might not provide a comprehensive assessment of the government’s annual revenue performance.
Providing a comparison with the previous year, the ministry said the interest-to-revenue ratio stood at 156 per cent in the first half of 2025, compared with 124 per cent during the corresponding period in 2026.
It added that federal revenue rose by 72 per cent, from N3.6 trillion in the first half of 2025 to N6.2 trillion in the same period of 2026.
Interest payments, on the other hand, increased by 38 per cent, from N5.6 trillion to N7.7 trillion over the same period.
The ministry described the slower growth in interest payments relative to revenue as evidence that the government’s economic and fiscal reforms were beginning to yield positive results.
“This is the result of reforms working, not a sign of fiscal distress,” it declared.
The ministry also maintained that the World Bank’s full-year projection provided a more appropriate basis for assessing Nigeria’s debt position than a comparison covering only six months.
It cited the World Bank’s projection that Nigeria’s total debt service, covering both interest and principal repayments, would account for 46 per cent of revenue in 2026.
“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 added.
On the legality of government borrowing, the ministry defended the administration’s debt strategy, stating that loans had received the necessary approval of the National Assembly and remained within the limits prescribed by the 2026 Appropriation Act and the approved borrowing plan.
It further maintained that the government’s borrowing activities complied with the Fiscal Responsibility Act 2007 and the Debt Management Office Act 2003.
Despite its objections to the World Bank’s assessment, the ministry did not provide revised revenue and interest payment figures or an alternative ratio to substantiate its position.
The disagreement has renewed attention on Nigeria’s debt sustainability, the rising cost of servicing public debt and the appropriate methodology for measuring the government’s capacity to meet its financial obligations.
While the Federal Government maintains that rising revenues and ongoing reforms are improving its fiscal position, the figures cited in the World Bank report highlight the pressure that interest payments continue to place on government finances.
