RismadarVoice Reporters
October 18, 2026
The Federal Government of Nigeria has challenged the World Bank’s assessment that Nigeria’s debt servicing obligations amounted to 124 per cent of federal revenue in the first half of 2026, describing the interpretation as misleading and arguing that it fails to reflect the country’s broader fiscal position.
The disagreement follows the publication of the World Bank’s Nigeria Development Update, which highlighted concerns about the relationship between government revenue and the cost of servicing public debt.
In a statement issued by the Federal Ministry of Finance, the government maintained that the figures had been interpreted without adequately accounting for debt obligations undertaken on behalf of state governments, unremitted revenue from public institutions and seasonal variations in revenue collection.
The ministry insisted that Nigeria’s fiscal position had improved under the administration’s economic reforms, pointing to stronger revenue growth and a reduction in the debt servicing burden compared with previous periods.
GOVERNMENT QUESTIONS WORLD BANK’S CALCULATION
According to the Finance Ministry, the reported 124 per cent ratio was based on interest payments of approximately ₦7.7 trillion against federal revenue of ₦6.2 trillion during the first six months of 2026.
The government argued that comparing these figures without adjusting for their respective coverage could exaggerate the pressure on federal finances.
It explained that some debt obligations serviced by the Federal Government relate to loans obtained for other tiers of government, including external loans benefiting states.
The ministry maintained that such obligations should not be assessed solely against revenue attributed to the Federal Government without considering the appropriate accounting treatment.
It also argued that the revenue figure used in the comparison was incomplete because it excluded income already generated by government agencies and enterprises but not yet remitted to the Treasury.
According to the ministry, these omissions could affect how the debt servicing burden is interpreted.
REVENUE RISES 72% IN ONE YEAR
The Federal Government presented comparative figures for the first halves of 2025 and 2026 to support its position that fiscal performance was improving.
According to the ministry, federal revenue increased from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion during the corresponding period of 2026.
This represented an increase of approximately 72 per cent.
Over the same period, interest payments rose from ₦5.6 trillion to ₦7.7 trillion, representing an increase of about 38 per cent.
The ministry argued that revenue was therefore growing considerably faster than interest costs, indicating an improvement in the government’s ability to meet its financial obligations.
It also noted that the reported interest-to-revenue ratio declined from approximately 156 per cent in the first half of 2025 to 124 per cent in the first half of 2026.
Although the latest figure remains above 100 per cent, the government maintained that the reduction demonstrated progress in its fiscal reforms.
The gap between interest payments and reported revenue also narrowed from approximately ₦2 trillion to ₦1.5 trillion over the same period.
FG SAYS FULL-YEAR DATA PROVIDES BETTER PICTURE
The Finance Ministry further argued that assessments based exclusively on the first six months of a financial year could produce an incomplete picture of government revenue performance.
It explained that some statutory tax payments are concentrated in the second half of the year, meaning revenue collections are not evenly distributed across the 12 months.
The ministry cited 2025 as an example, stating that although the interest-to-revenue ratio reached approximately 156 per cent in the first half of that year, the full-year debt-service-to-revenue ratio was below 60 per cent.
According to the government, this represented an improvement from a ratio of 97 per cent recorded before the implementation of its economic reforms.
It also pointed to the World Bank’s reported projection that Nigeria’s full-year debt service in 2026, covering both interest and principal repayments, would amount to 46 per cent of revenue.
The ministry described the full-year projection as a more appropriate benchmark for evaluating the country’s debt servicing position.
However, the distinction between interest payments alone and total debt service, which includes principal repayments, is important when interpreting the different figures.
MINISTRY DEFENDS FEDERAL BORROWING
Addressing concerns over Nigeria’s borrowing programme, the Federal Government maintained that its debt obligations were being managed within existing legal and budgetary frameworks.
The ministry said federal borrowing remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the authorised borrowing plan.
It also stated that borrowing activities complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
According to the ministry, the Debt Management Office regularly publishes information on the country’s borrowing activities and debt obligations to support transparency and public scrutiny.
The government rejected suggestions that the reported half-year ratio, taken in isolation, established that Nigeria was experiencing fiscal distress.
DEBT SUSTAINABILITY REMAINS UNDER SCRUTINY
The disagreement has renewed attention to Nigeria’s public debt burden and the proportion of government resources committed to meeting borrowing obligations.
A debt servicing ratio above 100 per cent indicates that the specified payments exceeded the revenue measured over the same period.
However, interpreting such a figure requires clarity about which debt payments and revenue sources are included, as well as the period being assessed.
While the government has highlighted improvements in revenue collection and a declining ratio, the figures also show that interest payments remained higher than the reported federal revenue during the first half of 2026.
This underscores the continuing importance of revenue mobilisation, expenditure management and sustainable borrowing practices.
The Finance Ministry said it welcomed scrutiny of Nigeria’s public finances but urged analysts and commentators to ensure that comparisons were consistent and based on complete information.
The dispute places renewed focus on the government’s economic reform programme and whether improvements in revenue collection will translate into stronger fiscal stability and greater resources for public services.
