Nigeria’s Finance Ministry Disputes World Bank’s 124% Debt Interest-To-Revenue Figure | Sahara Reporters

According to the ministry, the calculation combines debt serviced by the Federal Government on behalf of other tiers of government, including external loans to states, with federal revenue alone, thereby overstating the ratio.

Nigeria’s Federal Ministry of Finance has disputed a figure showing that the Federal Government’s interest payments reached 124 per cent of its revenue in the first half of 2026, describing the interpretation of the data as misleading.

The ministry, in a press release issued in Abuja on Sunday, said the figure, attributed to the World Bank’s October 2026 Nigeria Development Update, did not adequately account for the structure of government debt obligations and the timing of revenue collection.

According to the ministry, the calculation combines debt serviced by the Federal Government on behalf of other tiers of government, including external loans to states, with federal revenue alone, thereby overstating the ratio.

“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states,” the ministry said.

“Measuring this against federal revenue alone overstates the ratio which is only meaningful when debt and revenue cover the same level of government.”

The ministry also argued that the revenue figure used in the calculation was incomplete because it excluded independent revenue earned by government agencies and enterprises but not yet remitted to the Treasury.

It said revenue collection typically increases in the second half of the year because of the statutory timing of certain tax payments, making a half-year comparison an inadequate measure of the government’s overall fiscal position.

The ministry cited the 2025 figures as an example, stating that the interest-to-revenue ratio stood at 156 per cent in the first half of that year, while the full-year debt-service-to-revenue ratio fell below 60 per cent.

It said the ratio had declined from 97 per cent before the current administration’s reforms.

“This is a clear sign of the progress delivered by the current administration’s reforms,” the ministry said.

The ministry further defended the government’s fiscal position by comparing revenue and interest payments between the first halves of 2025 and 2026.

According to the statement, federal revenue increased by 72 per cent, from N3.6 trillion in the first half of 2025 to N6.2 trillion in the corresponding period of 2026.

Interest payments, however, rose by 38 per cent, from N5.6 trillion to N7.7 trillion over the same period.

The ministry said the figures showed that revenue was growing almost twice as fast as interest costs.

It added that 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.

The gap between interest payments and revenue also narrowed from N2 trillion to N1.5 trillion, according to the ministry.

“This is the result of reforms working, not a sign of fiscal distress,” the statement said.

The ministry also questioned the use of half-year figures to assess Nigeria’s debt sustainability, arguing that the government’s overall fiscal position should be evaluated using full-year data.

“Debt sustainability is assessed on a full-year basis, not over six months,” it said.

The ministry cited 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.

It described the projection as a more appropriate benchmark for assessing the country’s debt position.

The statement comes amid continuing public scrutiny of Nigeria’s debt burden, government revenue and the proportion of public funds devoted to servicing debt.

The ministry maintained that the 124 per cent figure, when considered without the broader fiscal context, could create a misleading impression of the country’s financial position.

It also defended the legality of the Federal Government’s borrowing, insisting that all loans were obtained within approved limits and in accordance with relevant laws.

“All borrowing is conducted in full compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003,” the ministry said.

It added that every naira borrowed by the Federal Government fell within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.

The ministry said details of government borrowing were published regularly by the Debt Management Office.

While welcoming scrutiny of public finances, the ministry urged analysts and commentators to consider the figures in context and ensure that comparable revenue and debt obligations were used when calculating fiscal ratios.

“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 added.