The Federal Government has disputed claims that its interest funds reached 124% of revenue within the first half of 2026, arguing that the determine presents an incomplete image of its fiscal place as a result of it excludes some authorities revenue and combines debt obligations throughout completely different tiers of authorities.
The Federal Ministry of Finance, in a press assertion issued on Sunday, October 18, mentioned the ratio cited in current evaluation primarily based on the World Bank’s October 2026 Nigeria Development Update was deceptive as a result of it in contrast federal interest funds with an incomplete revenue base.
The ministry mentioned the interest determine contains debt serviced by the Federal Government on behalf of different tiers of authorities, together with exterior loans to states, whereas the revenue determine excludes unbiased revenue earned by authorities businesses and enterprises however not but remitted to the Treasury.
FG explains Q2 revenue
It additionally argued that federal revenue sometimes will increase within the second half of the 12 months as a result of of the statutory timing of sure tax funds, making a half 12 months comparability an unreliable measure of the federal government’s total debt sustainability.
- “The reported revenue can also be incomplete. It excludes unbiased revenue already earned by authorities businesses and enterprises however not but remitted to the Treasury. In addition, extra revenue is usually earned within the second half of the 12 months than within the first because of the statutory timing of sure tax funds.
- “This is why the ratio stood at 156% in H1 2025, whereas the full-year 2025 debt-service-to-revenue ratio was beneath 60%, down from 97% earlier than the reforms.
- “This is a clear sign of the progress delivered by the current administration’s reforms,” the Ministry said.
The ministry mentioned federal revenue elevated by 72% 12 months on 12 months to N6.2 trillion within the first half of 2026, in contrast with N3.6 trillion in the identical interval of 2025.
Interest funds, in the meantime, rose by 38% to N7.7 trillion from N5.6 trillion over the identical interval.
The distinction between interest funds and revenue consequently narrowed to N1.5 trillion from N2 trillion a 12 months earlier, in line with the ministry.
It mentioned the figures confirmed that revenue was rising nearly twice as quick as interest prices, contributing to a 32 proportion level decline within the interest to revenue ratio.
World Bank says Nigeria’s interest funds are rising
In its 2026 Nigeria Development Update (NDU) titled ‘Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities,’ the World Bank mentioned Nigeria’s interest funds rose to N7.7 trillion within the first half of 2026, from N5.6 trillion within the corresponding interval of 2025.
According to the financial institution, the interest cost gulped 124.19 p.c of the federal authorities revenue.
The financial institution mentioned interest funds elevated to three.1 p.c of gross home product (GDP) from 2.5 p.c a 12 months earlier.
FG says full 12 months figures present higher debt evaluation
However, the Finance Ministry argued that debt sustainability needs to be assessed utilizing full 12 months figures somewhat than a six month snapshot.
- It cited the World Bank’s projection that Nigeria’s complete debt service, overlaying each interest and principal repayments, would quantity to 46% of revenue in 2026.
- The ministry described this as a extra acceptable benchmark for assessing the federal government’s debt servicing place, distinguishing it from the 124% ratio primarily based on interest funds and revenue within the first half of the 12 months.
- The ministry additionally cited the decline within the full 12 months debt service to revenue ratio to beneath 60% in 2025, in contrast with 156% within the first half of that 12 months and 97% earlier than the present administration’s reforms.
It attributed the development to the federal government’s fiscal reforms and the stronger revenue efficiency recorded since their implementation.
FG touts reform success
The concern with the World Bank’s claims got here as the federal government says Nigeria is beginning to change how it is perceived internationally, pointing to its tax overhaul and broader financial reforms as proof that the nation is shifting in direction of sustainable development and shared prosperity.
- Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, mentioned this as he defined his “Nigeria rising” narrative on the 2026 IMF-World Bank Meetings in Thailand.
- According to him, the Nigeria Rising narrative was designed to speak the adjustments happening within the nation and problem perceptions that don’t replicate the federal government’s evaluation of its financial progress.
Speaking on the closing press briefing of the Meetingss in Bangkok, Thailand, Oyedele mentioned he noticed rising interest in Nigeria amongst worldwide stakeholders in the course of the conferences, which he attributed to the nation’s ongoing reform programme.
