The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt sustainability, arguing that the ₦7.7tn spent on interest payments in the first half of 2026 does not accurately reflect the country’s overall fiscal position.
The Federal Ministry of Finance 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 concerns raised in the World Bank’s October 2026 Nigeria Development Update (NDU), which put Nigeria’s debt-servicing-to-revenue ratio at 124 per cent in the first half of the year.
However, the ministry argued that the figure was misleading because it was based on incomplete revenue data and included debt obligations serviced by the Federal Government on behalf of other tiers of government, including state governments.
According to the ministry, Nigeria’s fiscal position has improved, with government revenue growing faster than interest expenses, while the gap between the two has narrowed.
“The Federal Ministry of Finance has noted recent analysis and public commentary which, citing the World Bank’s October 2026 Nigeria Development Update, claims that Federal Government interest payments reached 124 per cent of revenue in the first half of 2026. This conclusion is misleading, for three reasons,” the statement said.
The ministry explained that the interest-payment figure included debt serviced by the Federal Government on behalf of other levels of government, particularly external loans obtained by state governments. Comparing these obligations with federal revenue alone, it argued, inflates the ratio because the debt and revenue figures do not cover the same level of government.
It also faulted the revenue figures used in the assessment, saying they excluded independent revenue generated by government agencies and enterprises but not yet remitted to the Treasury.
The ministry further maintained that the first-half figures did not provide a complete picture of the government’s annual revenue position because statutory payment schedules mean that some taxes are collected predominantly in the second half of the year.
To support its argument, the ministry cited the debt-service-to-revenue ratio recorded in 2025. According to the statement, the ratio stood at 156 per cent in the first half of 2025 but fell below 60 per cent for the full year, compared with 97 per cent before the government’s reforms.
“This is a clear sign of the progress delivered by the current administration’s reforms,” the ministry said.
It added that between the first half of 2025 and the corresponding period in 2026, federal revenue increased by 72 per cent, rising from ₦3.6tn to ₦6.2tn. Over the same period, interest payments grew by 38 per cent, from ₦5.6tn to ₦7.7tn.
The ministry said the figures showed that revenue was expanding almost twice as fast as interest costs. Consequently, the interest-to-revenue ratio declined by 32 percentage points, from 156 per cent in the first half of 2025 to 124 per cent in the first half of 2026.
It also noted that the gap between interest payments and revenue narrowed from ₦2tn to ₦1.5tn during the period, describing the trend as evidence that the government’s fiscal reforms were yielding results rather than indicating worsening fiscal conditions.
On the broader question of debt sustainability, the ministry argued that the assessment should be based on full-year figures rather than data covering only six months.
It cited the World Bank’s projection that Nigeria’s total debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue for the full year in 2026.
“This is the appropriate benchmark, and a guide to avoid the invalid conclusions being drawn,” the statement added.
The ministry also maintained that all federal borrowing remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the government’s approved borrowing plan.
It said borrowing activities complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, adding that details of the government’s debt obligations were regularly published by the Debt Management Office.
While reaffirming its willingness to subject public finances to scrutiny, the ministry urged analysts and commentators to interpret fiscal data in context and ensure that comparisons were made between figures covering the same scope and period.
“The Ministry welcomes informed scrutiny of public finances. 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 statement said.
