The federal government has said its interest payments stood below 60 per cent of revenue in 2025 and not 124 per cent as claimed in recent public commentary citing the World Bank’s October 2026 Nigeria Development Update.
The Federal Ministry of Finance said the claim that federal interest payments reached 124 per cent of revenue in the first half of 2026 is misleading.
In a statement on Sunday, the ministry said the conclusion is flawed for three reasons.
First, it said the analysis compares mismatched figures against an incomplete revenue base.
“The interest figure includes debt the federal government services on behalf of other tiers of government, including external loans to states.
“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 said.
It said the reported revenue is also incomplete as it excludes independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury. It added that more revenue is typically earned in the second half of the year than in the first due to the statutory timing of certain tax payments.
“This is why the ratio stood at 156 per cent in H1 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60 per cent, down from 97 per cent before the reforms. This is a clear sign of the progress delivered by the current administration’s reforms,” the ministry said.
Second, the ministry said even on the same calculation, the position has improved significantly.
It said between the first half of 2025 and the first half of 2026, federal revenue rose by 72 per cent, from N3.6 trillion to N6.2 trillion, while interest payments rose by 38 per cent, from N5.6 trillion to N7.7 trillion.
“Revenue is therefore growing almost twice as fast as interest costs. As a result, the interest-to-revenue ratio fell by 32 percentage points in a single year, from 156 per cent to 124 per cent, and the gap between interest and revenue narrowed from N2.0 trillion to N1.5 trillion. This is the result of reforms working, not a sign of fiscal distress,” it said.
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Third, it said a half-year snapshot is not a measure of debt sustainability, noting that sustainability is assessed on a full-year basis.
“The same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46 per cent of revenue. This is the appropriate benchmark and a guide to avoid invalid conclusions being drawn,” it added.
The ministry also said all borrowing by the federal government falls within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It said all borrowing is conducted in compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, and is published regularly by the Debt Management Office.
“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,” it said.
