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.
- 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.
- 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.
- 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
