By Danjuma Amodu
The Federal Ministry of Finance has dismissed claims that Federal Government interest payments reached 124 per cent of revenue in the first half of 2026, describing the conclusion as misleading.
The Ministry was reacting to analysis and public commentary citing the World Bank’s October 2026 Nigeria Development Update.
In a press release issued on Saturday in Abuja, the Ministry said the claim was flawed for three reasons.
First, it said the analysis compared mismatched figures against an incomplete revenue base. According to the Ministry, the interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states, while measuring it against federal revenue alone overstates the ratio.
It added that the reported revenue was also incomplete as it excluded independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury. It noted that more revenue was typically earned in the second half of the year 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,” the Ministry stated.
Second, the Ministry said even on the same calculation, the fiscal position had improved significantly. It said between H1 2025 and H1 2026, federal revenue rose by 72 per cent from N3.6 trillion to N6.2 trillion, while interest payments rose by a slower 38 per cent from N5.6 trillion to N7.7 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 N2.0 trillion to N1.5 trillion. This is the result of reforms working, not a sign of fiscal distress,” it said.
Third, the Ministry argued that a half-year snapshot was not a measure of debt sustainability, noting that debt sustainability was assessed on a full-year basis.
It added that the same World Bank report projected Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46 per cent of revenue.
“All borrowing is lawful and approved,” the Ministry stressed, saying every naira borrowed fell within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It said all borrowing was conducted in full compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, and was published regularly by the Debt Management Office.
The Ministry welcomed informed scrutiny of public finances but urged analysts and commentators to apply rigour, compare like with like, read figures in context and seek clarification where data was unclear.
