Finance Ministry says revenue growth is outpacing interest costs, argues first-half figures give an incomplete picture of Nigeria’s debt position………
The Federal Government has pushed back against concerns raised by the World Bank over Nigeria’s debt burden, insisting that figures showing interest payments at 124 per cent of revenue in the first half of 2026 do not accurately reflect the country’s fiscal position.
The Federal Ministry of Finance said the assessment was based on incomplete revenue data and included interest obligations on loans obtained by state governments but serviced by the Federal Government.
The ministry outlined 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.
The disagreement follows the World Bank’s October 2026 Nigeria Development Update, which highlighted the country’s debt servicing-to-revenue ratio as a concern, with the ratio reaching 124 per cent in the first six months of the year.
However, the ministry argued that using the figure to assess the Federal Government’s debt position without accounting for the scope of the obligations and the timing of revenue collection could lead to a misleading conclusion.
It explained that the interest payments included debts serviced on behalf of other tiers of government, particularly external loans obtained by state governments.
According to the ministry, comparing such obligations with federal revenue alone inflates the ratio because the calculation does not match the level of government responsible for the debt with the revenue used to measure its capacity to pay.
The ministry also faulted the revenue figures used in the assessment, saying they excluded income already generated by government agencies and enterprises but not yet transferred to the Treasury.
It further argued that first-half revenue figures do not capture the full pattern of government earnings, as certain taxes are typically collected in greater amounts during the second half of the year because of statutory payment schedules.
To support its position, the ministry pointed to the difference between Nigeria’s first-half debt figures in 2025 and the full-year outcome.
It said the debt-service-to-revenue ratio stood at 156 per cent in the first half of 2025, but fell below 60 per cent for the full year, compared with 97 per cent before the current administration’s reforms.
The ministry described the figures as evidence that the reforms were improving government finances, arguing that the trend in revenue growth relative to interest costs offered a more balanced assessment of the country’s fiscal position.
Providing a breakdown of the latest figures, it said federal revenue increased by 72 per cent, from N3.6 trillion in the first half of 2025 to N6.2 trillion in the corresponding period of 2026.
Interest payments, meanwhile, rose by 38 per cent, from N5.6 trillion to N7.7 trillion over the same period.
The ministry maintained that revenue was therefore growing almost twice as fast as interest costs.
It added that the interest-to-revenue ratio declined by 32 percentage points, from 156 per cent in the first half of 2025 to 124 per cent in the first half of 2026.
The difference between interest payments and revenue also narrowed from N2 trillion to N1.5 trillion, which the ministry said reflected the impact of ongoing fiscal reforms rather than evidence of worsening financial conditions.
Beyond the first-half figures, the ministry argued that Nigeria’s debt sustainability should be assessed using full-year data rather than a six-month snapshot.
It cited the World Bank’s projection that the country’s total debt service, covering both principal repayments and interest, would account for 46 per cent of revenue in 2026.
The ministry described the projected full-year ratio as a more appropriate benchmark for assessing the country’s debt position, warning against drawing conclusions from figures that do not capture the complete fiscal picture.
On borrowing, the government maintained that every naira borrowed fell within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It added that its borrowing activities complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, noting that borrowing information was regularly published by the Debt Management Office.
While acknowledging the importance of public scrutiny of government finances, the ministry urged analysts and commentators to consider the context behind fiscal data and ensure that comparisons were made on a consistent basis.
It also encouraged those examining the figures to seek clarification where necessary, maintaining that a proper assessment of Nigeria’s debt position must account for the timing of revenue collection, the scope of debt obligations and the full-year fiscal outlook.
