The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt burden, describing as misleading reports that interest payments reached N7.7tn in the first half of 2026, exceeding federal revenue by N1.5tn.
The Federal Ministry of Finance argued that the calculation, which put interest payments at 124.2 per cent of revenue, relied on incomplete revenue figures and included debt obligations serviced on behalf of state governments.
The ministry 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.
The response followed the World Bank’s October 2026 Nigeria Development Update, which put federal revenue at N6.2tn and interest payments at N7.7tn between January and June.
The bank also reported that interest payments increased from N5.6tn in the corresponding period of 2025, amid high domestic borrowing costs.
FG challenges calculation
The ministry said the 124.2 per cent ratio was misleading for three reasons.
First, it argued that the interest-payment figure included debt obligations serviced by the Federal Government on behalf of state governments, particularly external loans, while the revenue figure covered federal receipts alone.
According to the ministry, comparing obligations covering multiple levels of government against federal revenue overstated the ratio.
Second, it said the calculation excluded revenue earned by government agencies and enterprises but not yet remitted to the Treasury.
Third, the ministry argued that statutory payment schedules meant some taxes were collected predominantly in the second half of the year, making first-half revenue an incomplete basis for assessing annual debt obligations.
However, the ministry did not provide revised revenue and interest-payment figures or an alternative ratio to demonstrate the effect of the exclusions it identified.
Revenue rises faster than interest payments
The ministry said federal revenue rose by approximately 72 per cent, from N3.6tn in the first half of 2025 to N6.2tn in the corresponding period of 2026.
Interest payments also increased, rising by about 38 per cent from N5.6tn to N7.7tn.
According to the ministry, the interest-to-revenue ratio consequently declined from 156 per cent in the first half of 2025 to approximately 124 per cent in the same period of 2026.
It added that the gap between interest payments and revenue narrowed from N2tn to N1.5tn.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry said.
The government also rejected the use of a six-month fiscal snapshot as a definitive measure of debt sustainability.
It cited a World Bank projection that Nigeria’s full-year 2026 debt-service-to-revenue ratio, covering both interest and principal repayments, would stand at 46 per cent.
The ministry described the projected full-year figure as a more appropriate benchmark for evaluating the country’s debt position.
However, the 124.2 per cent figure and the 46 per cent projection cover different periods and measures. The former compares first-half interest payments with first-half federal revenue, while the latter covers projected full-year debt service, including principal repayments.
Government defends borrowing programme
The ministry also defended the administration’s borrowing programme, insisting that all loans obtained under the current government were lawful and duly approved.
It said borrowing remained within limits authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
The ministry added that the programme complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, while information on the country’s debt obligations was regularly published by the Debt Management Office.
The dispute comes amid scrutiny of Nigeria’s external borrowing. In June 2026, the World Bank approved a $1.25bn financing package for Nigeria under the Nigeria Actions for Investment and Jobs Acceleration programme.
The facility comprises a $750m credit from the International Development Association and a $500m loan from the International Bank for Reconstruction and Development.
The financing is intended to support reforms aimed at expanding access to credit, improving electricity supply, strengthening trade competitiveness and increasing government revenue.
Under the repayment schedules described in financing agreements reviewed by The PUNCH, principal repayments on both facilities are due to begin in December 2031. The IDA credit is scheduled to be fully repaid by June 2051, while the IBRD loan runs until June 2060.
The repayment schedules cover principal only, excluding interest and other applicable charges.
While the Federal Government maintains that rising revenue and ongoing reforms are improving its fiscal position, the World Bank’s reported figures show that interest payments continued to increase in the first half of 2026.
The disagreement has renewed attention on how Nigeria measures its debt burden, particularly the need for comparable figures covering the same levels of government, revenue sources and reporting periods.
