Nigerian Gov’t Disputes World Bank’s ₦7.7 Trillion Debt Interest Warning

The Federal Government has defended Nigeria’s debt position, insisting that rising revenue and ongoing economic reforms show that the country is making progress, despite concerns raised by the World Bank over ₦7.7 trillion spent on interest payments in the first half of 2026.

The government rejected the bank’s assessment that interest payments amounted to 124 per cent of federal revenue between January and June, describing the figure as misleading because it was based on incomplete revenue data and included debts serviced on behalf of state governments.

The Federal Ministry of Finance 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, Naija News reports.

The response followed the World Bank’s October 2026 Nigeria Development Update, which raised concerns about the country’s debt-servicing burden.

According to the ministry, Nigeria’s financial position has improved because government revenue is increasing faster than interest payments.

It identified three reasons why the World Bank’s 124 per cent figure should not be used alone to judge the country’s debt position.

• First, the ministry said the interest payments included debts the Federal Government services on behalf of other levels of government, including external loans taken by state governments. It argued that comparing such payments with federal revenue alone gives a misleading picture because the figures do not cover the same level of government.

• Second, the ministry said the revenue figure used in the calculation was incomplete because it excluded money already earned by government agencies and enterprises but not yet paid into the Treasury.
• Third, it explained that some taxes are collected mainly in the second half of the year because of statutory payment schedules. This, it said, makes first-half revenue an incomplete basis for judging the government’s full-year debt obligations.

The ministry noted that the interest-to-revenue ratio stood at 156 per cent in the first half of 2025 but fell to 124 per cent in the corresponding period of 2026.

It added that the full-year debt-service-to-revenue ratio for 2025 was below 60 per cent, compared with 97 per cent before the current administration’s reforms.

FG Gives Breakdown Of Revenue, Interest Payments

The ministry said Federal Government revenue increased by 72 per cent between the first half of 2025 and the first half of 2026.

According to the figures released, revenue rose from ₦3.6 trillion to ₦6.2 trillion during the period.

Interest payments, on the other hand, increased by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.

The ministry argued that the difference showed that revenue was growing much faster than the cost of servicing debt.

It also said the gap between interest payments and revenue had narrowed from ₦2 trillion in the first half of 2025 to ₦1.5 trillion in the first half of 2026.

The statement added, “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%.”

The ministry described the development as evidence that the government’s economic reforms were producing results rather than a sign that the country’s finances were in distress.

The Finance Ministry also argued that Nigeria’s debt sustainability should be assessed using full-year figures rather than data covering only six months.

It cited the World Bank’s projection that Nigeria’s total debt service, covering both interest and principal payments, would amount to 46 per cent of revenue for the full year in 2026.

The ministry described this as a more appropriate measure for assessing the country’s debt position.

It also maintained that all Federal Government borrowing was within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.

According to the ministry, the government conducts its borrowing in line with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.

It added that borrowing information is regularly published by the Debt Management Office.

The ministry said it welcomed public scrutiny of government finances but urged analysts and commentators to examine figures in their proper context.

It advised those assessing Nigeria’s debt position to compare figures covering the same level of government and to consider the timing of revenue collection before drawing conclusions.