FG Disputes World Bank’s N7.7tn Interest Payments Assessment, Cites Revenue Growth
The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt position, disputing claims that interest payments of N7.7tn in the first half of 2026 exceeded government revenue and raised concerns about the country’s debt sustainability.
The Federal Ministry of Finance described the reported interest-to-revenue ratio of 124 per cent as misleading, arguing that the calculation relied on incomplete revenue figures and included debt obligations serviced by the Federal Government on behalf of state governments.
The ministry stated its position in a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, following reports based on the World Bank’s October 2026 Nigeria Development Update.
According to the report, the Federal Government recorded revenue of N6.2tn and interest payments of N7.7tn between January and June 2026. An analysis of the figures showed that interest payments exceeded revenue by N1.5tn.
However, the Finance Ministry argued that the calculation combined debt obligations covering multiple tiers of government with revenue attributed solely to the Federal Government. It also said the figures excluded some income earned by government agencies and enterprises but not yet remitted to the Treasury.
“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 stated.
The ministry further argued that first-half revenue figures did not provide a complete picture of the government’s annual fiscal position because some taxes are collected predominantly in the second half of the year. It said the interest-to-revenue ratio had declined from 156 per cent in the first half of 2025 to approximately 124 per cent in the corresponding period of 2026.
The government also reported that revenue increased by 72 per cent, from N3.6tn in the first half of 2025 to N6.2tn in the same period of 2026, while interest payments rose by 38 per cent, from N5.6tn to N7.7tn. It said the figures reflected revenue growing faster than interest obligations.
The ministry maintained that the full-year debt-service-to-revenue ratio was a more appropriate measure of the country’s fiscal position, citing the World Bank’s projection that Nigeria’s debt service, covering both principal and interest, would amount to 46 per cent of revenue in 2026.
“This is the result of reforms working, not a sign of fiscal distress,” the ministry declared, rejecting the use of a six-month fiscal snapshot as a definitive measure of debt sustainability.
The Federal Government also defended its borrowing programme, stating that loans obtained by the current administration were lawful and duly approved. It said borrowing complied with the Fiscal Responsibility Act 2007, the Debt Management Office (Establishment) Act 2003 and limits authorised by the National Assembly.
Meanwhile, financing agreements reviewed by The PUNCH showed that Nigeria would begin repaying the principal on a $1.25bn World Bank loan in December 2031, with the final instalment on one of the facilities scheduled for June 2060.
The facility, secured under the Nigeria Actions for Investment and Jobs Acceleration Development Policy Financing programme, comprises a $750m concessional credit from the International Development Association and a $500m loan from the International Bank for Reconstruction and Development.
The financing is intended to support reforms aimed at improving access to credit, expanding electricity supply, strengthening trade competitiveness, improving digital services and increasing government revenue.
Under the repayment schedules, principal repayments on both facilities will begin on December 15, 2031. The IDA credit is scheduled to be fully repaid by June 2051, while the IBRD loan will run until June 2060.
The repayment arrangements include semi-annual principal instalments of $18.75m on the IDA credit and approximately $8.6m on the IBRD loan during the applicable repayment periods. These figures exclude interest and other charges, meaning the total cost of borrowing will depend on the applicable rates and contractual provisions.
The financing agreements also contain conditions relating to the implementation of agreed economic reforms, maintenance of an adequate macroeconomic framework, reporting of loan proceeds and independent auditing of relevant accounts.
Despite challenging the World Bank’s assessment of the interest-to-revenue ratio, the Finance Ministry did not provide revised revenue and interest-payment figures or an alternative ratio to substantiate its position.