The Federal Ministry of Finance has challenged the claim that the Federal Government’s interest payments hit 124 percent of its revenue in the first half of 2026. They called the figure misleading.
The ministry explained that recent analysis and comments, which referenced the World Bank’s October 2026 Nigeria Development Update, mixed up interest figures with an incomplete revenue base.
In a statement released on Sunday, the ministry noted that the 124 percent interest figure includes debt serviced by the federal government for other levels of government, including loans given to states.
"Measuring this against federal revenue alone makes the ratio seem higher than it really is. It only makes sense when debt and revenue cover the same government level," the statement said.
The ministry also pointed out that the reported revenue is not complete. It does not include independent revenue earned by government agencies and enterprises that have not yet been sent to the treasury.
"Also, more revenue is usually collected in the second half of the year than in the first due to when certain payments are made. This is why the ratio was 156% in H1 2025, but the full-year 2025 debt service-to-revenue ratio was below 60%, down from 97% before the reforms," it said.
The ministry shared that federal revenue increased by 72 percent, from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the same period of 2026.
Interest payments also went up by 38 percent, rising from ₦5.6 trillion to ₦7.7 trillion during the same time, according to the ministry.
"The interest-to-revenue ratio dropped by 32 percentage points in just one year, from 156% to 124%. The gap between interest and revenue shrank from ₦2.0 trillion to ₦1.5 trillion," the ministry said.
The ministry linked these changes to the current administration’s economic reforms, arguing that revenue is growing faster than interest costs.
They stated that a six-month figure should not be used to judge the sustainability of government debt.
"Debt sustainability is looked at on a full-year basis, not just six months," the statement said.
Citing the World Bank report, the ministry mentioned that Nigeria’s full-year 2026 debt service, which includes both interest and principal, is expected to be 46 percent of revenue. They said this is the right benchmark for checking the country’s debt-service burden.
The ministry noted that all borrowing stays within the limits set by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan, following the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
"We urge analysts and commentators to apply the same standards they expect from the government: compare similar data, read figures in context, and ask for clarification when the data is not clear," the ministry said.
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