The Federal Government has rejected claims that Nigeria’s interest payments on loans consumed 124 per cent of its revenue in the first half of 2026, insisting that the country’s full-year debt burden is considerably lower.
The Federal Ministry of Finance, in a statement issued on Sunday, October 18, said the figure being circulated following the World Bank’s October 2026 Nigeria Development Update did not provide an accurate picture of the government’s financial position.
It explained that the 124 per cent calculation compared interest payments covering obligations across different levels of government with revenue attributed only to the Federal Government.
The ministry maintained that such a comparison exaggerated the country’s debt burden, particularly because some government earnings had not been included in the reported revenue figures.
According to the ministry, the interest calculation covers loans serviced by the Federal Government on behalf of states, including external borrowing.
It argued that a meaningful assessment must compare debt obligations and revenue belonging to the same level of government.
The ministry also identified unremitted earnings from government agencies and enterprises as another reason the reported revenue figure was incomplete.
It noted that certain tax payments are scheduled for the second half of the year, making six-month revenue figures an unreliable basis for assessing annual debt sustainability.
Providing a comparison, the government disclosed that federal revenue increased from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion during the corresponding period of 2026.
This represented a 72 per cent increase, while interest payments rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.
Consequently, the interest-to-revenue ratio declined from 156 per cent in the first half of 2025 to 124 per cent in the first half of 2026, representing a reduction of 32 percentage points.
The difference between interest payments and revenue also narrowed from ₦2 trillion to ₦1.5 trillion over the same period.
The ministry presented these changes as evidence that government revenue was growing faster than borrowing costs.
It further disclosed that Nigeria’s full-year debt-service-to-revenue ratio fell below 60 per cent in 2025, compared with 97 per cent before the introduction of the current administration’s economic reforms.
The ministry maintained that the improvement demonstrated progress in the government’s efforts to strengthen public finances.
Addressing concerns about the 2026 figures, it referred to 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 for the full year.
The government argued that this annual projection provided a more appropriate basis for evaluating the country’s debt obligations than the first-half interest payment figure.
The distinction is important because interest payments represent the cost of borrowing, while total debt service includes both interest and repayment of loan principal.
The ministry maintained that conclusions about debt sustainability should be based on a full-year assessment rather than figures covering only the first six months.
It also defended the legality of Federal Government borrowing, stating that all loans were obtained within limits approved by the National Assembly.
According to the ministry, borrowing undertaken in 2026 complies with the Appropriation Act and the approved borrowing plan.
It added that the government’s borrowing activities were conducted in accordance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
The ministry said the Debt Management Office regularly publishes information on government borrowing to support public accountability.
While acknowledging the importance of public scrutiny of Nigeria’s finances, the ministry urged analysts to examine debt and revenue figures using comparable data and appropriate reporting periods.
It maintained that the decline in the interest-to-revenue ratio between the first halves of 2025 and 2026 reflected improving fiscal conditions rather than worsening financial pressure.
The government’s position comes amid continuing public debate over Nigeria’s debt obligations, revenue generation and the proportion of public resources required to meet borrowing costs.
