The Federal Ministry of Finance has disputed a claim that the Federal Government’s interest payments reached 124 per cent of its revenue in the first half of 2026, describing the figure as misleading.
The ministry said recent analysis and public commentary, which cited the World Bank’s October 2026 Nigeria Development Update, compared mismatched interest figures against an incomplete revenue base.
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In a statement released on Sunday, the ministry said the 124 per cent interest calculation includes the debt serviced by the federal government on behalf of other tiers of government, including external loans to states.
“Measuring this against federal revenue alone overstates the ratio, which is only meaningful when debt and revenue cover the same level of government,” the statement said.
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The ministry also asserted that the reported revenue is incomplete as it excludes the independent revenue earned by government agencies and enterprises but not yet remitted to the treasury.
“In addition, more revenue is typically earned in the second half of the year than in the first due to the statutory timing of certain 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,” it stated.
The ministry explained that federal revenue rose by 72 per cent from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026.
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Interest payments, however, rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion over the same period, according to the ministry.
“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 ₦2.0 trillion to ₦1.5 trillion,” the ministry said.
The ministry attributed the changes to the current administration’s economic reforms, arguing that revenue is growing faster than interest costs.
It argued that a six-month figure alone should not be used to evaluate the sustainability of government debt.
“Debt sustainability is assessed on a full-year basis, not over six months,” the statement said.
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Citing the World Bank report, the ministry said Nigeria’s full-year 2026 debt service, covering both interest and principal, is projected at 46 per cent of revenue, and that this forecast is the appropriate benchmark for assessing the country’s debt-service burden.
The ministry noted that all borrowing falls within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan, in compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
“We encourage analysts and commentators to apply the same rigour they seek to hold the government to: compare like with like, read figures in context, and seek clarification where the data is unclear,” the ministry said.
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