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The Federal Government has defended Nigeria’s fiscal performance following concerns over a World Bank report indicating that interest payments consumed 124 per cent of federal revenue in the first six months of 2026.
The Federal Ministry of Finance described interpretations of the figures as misleading, arguing that the reported ratio does not provide a complete picture of government finances. In a statement issued in Abuja, the ministry said the assessment failed to account for the structure of debt obligations, revenue collection patterns and additional income available to the Federal Government.
According to the ministry, the interest payments include obligations the Federal Government services on behalf of state governments, particularly loans obtained from external creditors. It argued that comparing these payments solely with federal revenue creates an imbalance that exaggerates the financial burden on the central government.
The ministry also noted that some revenue generated by government agencies and enterprises had not been captured in the figures because the funds were yet to be transferred to the Treasury. It added that revenue inflows typically increase in the second half of the year, making figures from the first six months insufficient for determining overall annual performance.
To illustrate its argument, the ministry cited figures from 2025, when the interest-to-revenue ratio reportedly stood at 156 per cent during the first half but fell below 60 per cent on a full-year basis. It contrasted this with the 97 per cent ratio recorded before the current administration introduced its fiscal reforms.
The ministry further disclosed that federal revenue increased by 72 per cent, rising from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026. Interest payments, meanwhile, grew by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.
It said the difference in growth rates reduced the interest-to-revenue ratio by 32 percentage points, from 156 per cent to 124 per cent. The gap between revenue and interest obligations also narrowed from ₦2 trillion in the first half of 2025 to ₦1.5 trillion in the first half of 2026.
On Nigeria’s debt sustainability, the ministry urged analysts and members of the public to consider the broader fiscal outlook rather than rely exclusively on six-month figures. It pointed to the World Bank’s projection that Nigeria’s total debt service, including interest and principal repayments, would amount to 46 per cent of revenue for the full year.
The ministry also maintained that federal borrowing complies with existing laws and approved limits. It said loans were being obtained within the borrowing framework authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan, in line with the Fiscal Responsibility Act of 2007 and the Debt Management Office (Establishment) Act of 2003.
While acknowledging the importance of public scrutiny of government spending and borrowing, the ministry called on financial analysts, commentators and other stakeholders to exercise caution when interpreting fiscal statistics. It stressed that meaningful assessments must account for the scope of government obligations, the timing of revenue receipts and full-year financial projections to avoid drawing misleading conclusions about Nigeria’s economic position.
