The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt position, describing concerns that interest payments exceeded government revenue in the first half of 2026 as misleading and arguing that the calculation failed to capture the full picture of the country’s fiscal position.
The Federal Ministry of Finance said the reported interest payments of ₦7.7 trillion, equivalent to about 124 per cent of the Federal Government’s ₦6.2 trillion revenue during the period, were calculated using figures that did not adequately account for the structure of government revenue and debt obligations.
In a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the ministry argued that the assessment compared debt obligations covering multiple tiers of government with revenue attributed solely to the Federal Government.
The disagreement follows the World Bank’s October 2026 Nigeria Development Update, which reported Federal Government revenue of ₦6.2 trillion and interest payments of ₦7.7 trillion for the first six months of the year.
Calculations based on the published figures put the interest-to-revenue ratio at approximately 124.2 per cent, meaning interest payments exceeded the reported revenue by ₦1.5 trillion.
Although the World Bank’s figures underpin the calculation, the 124 per cent ratio was derived from the published data rather than expressly stated in the report.
The ministry, however, maintained that the figures should not be interpreted as a definitive indication of Nigeria’s debt sustainability, insisting that a more comprehensive assessment must account for the scope of government obligations, revenue collection patterns and full-year fiscal projections.
Explaining its objections, the ministry said the interest-payment figure included debt serviced by the Federal Government on behalf of other tiers of government, including external loans obtained by state governments.
According to the ministry, comparing such obligations exclusively against Federal Government revenue inflates the ratio because the figures do not cover the same level of government.
“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states,” the statement said.
It added that the ratio would only provide a meaningful assessment if the debt obligations and revenue used in the calculation covered the same level of government.
The ministry also argued that the revenue figure did not include income earned by government agencies and enterprises that had not yet been remitted to the Treasury.
It further cited statutory payment schedules under which some taxes are collected predominantly in the second half of the year, arguing that first-half revenue figures might not adequately represent the government’s annual revenue position.
However, while challenging the methodology behind the assessment, the ministry did not provide revised figures for revenue and interest payments or an alternative ratio demonstrating the effect of the adjustments it proposed.
The ministry defended the government’s fiscal performance by highlighting what it described as faster growth in revenue than in interest payments.
According to the statement, Federal Government revenue increased by 72 per cent from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026.
Over the same period, interest payments rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.
The ministry said the difference in growth rates reflected an improvement in the government’s capacity to generate revenue relative to its interest obligations.
It also stated that the interest-to-revenue ratio declined from 156 per cent in the first half of 2025 to approximately 124 per cent in the first half of 2026.
Consequently, the gap between reported interest payments and revenue narrowed from ₦2 trillion to ₦1.5 trillion.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry declared.
The figures indicate that revenue grew faster than interest payments during the period. However, interest payments remained higher than the reported Federal Government revenue, underscoring the importance of the scope of the figures and the distinction between short-term fiscal performance and longer-term debt sustainability.
The ministry also rejected the use of a six-month fiscal snapshot as a conclusive measure of Nigeria’s debt position, arguing that full-year projections offered a more appropriate basis for assessing the country’s capacity to service its obligations.
It cited the World Bank’s projection that Nigeria’s full-year 2026 debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue.
“The same World Bank report projects Nigeria’s full-year 2026 debt service, covering both interest and principal, at 46 per cent of revenue,” the statement said.
The ministry described the projected figure as the appropriate benchmark for evaluating the government’s debt-service burden.
However, the full-year projection and the first-half interest-to-revenue calculation measure different things. The former covers both interest and principal repayments over the entire year, while the latter compares interest payments alone with reported revenue during six months.
A meaningful comparison therefore requires clarity on the revenue coverage, debt obligations and time periods used in each measure.
The ministry maintained that the full-year outlook provided a more complete picture of Nigeria’s fiscal position, although the projection remains subject to actual revenue collection and debt-service outcomes.
Beyond the dispute over the World Bank’s assessment, the Federal Government defended its borrowing programme, insisting that loans obtained by the current administration were lawful and duly approved.
According to the ministry, all borrowing fell within the limits authorised by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It also said the government’s borrowing activities complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
The ministry added that details of Nigeria’s debt obligations were regularly published by the Debt Management Office, which provides information on the country’s public debt position.
The defence comes amid continuing scrutiny of government borrowing, debt-service costs and the capacity of public revenue to support expenditure on infrastructure, social services and other national priorities.
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Although borrowing can provide funding for capital projects and budget implementation, the cost of servicing accumulated debt remains an important consideration in evaluating fiscal sustainability.
The disagreement between the Federal Government and the World Bank highlights the continuing debate over how Nigeria’s debt burden should be measured, particularly amid efforts to increase revenue and manage rising public expenditure.
For the government, the faster growth in revenue relative to interest payments and the projected full-year debt-service ratio provide grounds for a more measured interpretation of the country’s fiscal position.
The World Bank’s published figures, meanwhile, show that reported first-half interest payments exceeded the Federal Government revenue figure used in the comparison, raising questions about the immediate pressure of debt servicing on public finances.
Resolving the disagreement requires a clear reconciliation of the revenue figures, the debt obligations included in the calculations and the treatment of funds collected or serviced on behalf of other tiers of government.
The ministry’s response has challenged the interpretation of the figures but has not supplied an alternative calculation to quantify the impact of the exclusions it identified.
Ultimately, the sustainability of Nigeria’s debt will depend not only on the growth of government revenue but also on borrowing costs, repayment obligations, fiscal discipline and the government’s ability to generate sufficient resources to meet its commitments without undermining essential public spending.
