Nigeria Disagrees With World Bank Over ₦7.7tn Debt Interest Payments
The World Bank has raised concern over Nigeria's debt servicing/revenue ratio for the first half of 2026, put at 124 per cent or about N7.7 trillion.
The World Bank has raised concern over Nigeria's debt servicing/revenue ratio for the first half of 2026, put at 124 per cent or about N7.7 trillion.
The bank raised its concerns in its Nigeria Development Update, NDU, even as the Federal Government has disagreed with the World Bank's assertion that interest payments of N7.7tn in the first half of 2026 threaten the country’s debt sustainability.
The government 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.
Oyedele noted that Nigeria’s fiscal position had improved, with revenue growing faster than interest payments, adding that reports that interest payments amounted to 124 per cent of Federal Government revenue during the period as misleading.
Oyedele noted that Nigeria’s fiscal position had improved, with revenue growing faster than interest payments, adding that reports that interest payments amounted to 124 per cent of Federal Government revenue during the period as misleading.
The government further argued that the calculation relied on incomplete revenue figures and included debt obligations serviced on behalf of state governments.I
It also argued that the revenue figure excluded income earned by government agencies and enterprises but not yet remitted to the Treasury, adding further
that statutory payment schedules meant some taxes were collected predominantly in the second half of the year, making first-half revenue an incomplete basis for assessing annual debt obligations.
The statement read, “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 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.
The statement read, “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 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.
“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.
“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.
“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.”
“This is a clear sign of the progress delivered by the current administration’s reforms.
“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.
“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.
“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.”
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