FG defends fiscal reforms as World Bank flags ₦7.7tn debt interest

The Federal Government has defended Nigeria’s debt position following concerns raised in the World Bank’s October 2026 Nigeria Development Update over the country’s debt-servicing burden.

The Federal Ministry of Finance said the country’s financial position was improving, arguing that government revenue was growing faster than interest payments on its debt.

The ministry identified three key reasons it believes the World Bank’s reported interest-to-revenue ratio of 124 per cent should not be considered in isolation when assessing Nigeria’s debt position.

According to the ministry, the ratio fell from 156 per cent in the first half of 2025 to 124 per cent in the corresponding period of 2026.

It also stated that Nigeria’s full-year debt-service-to-revenue ratio in 2025 was below 60 per cent, compared with 97 per cent before the current administration’s economic reforms.

FG Cites Growth in Revenue

The ministry said Federal Government revenue increased by 72 per cent between the first half of 2025 and the first half of 2026.

Revenue reportedly rose from ₦3.6 trillion to ₦6.2 trillion during the period, while interest payments increased by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.

The ministry argued that the figures showed revenue was growing at a faster rate than the cost of servicing debt.

It added that the gap between interest payments and revenue narrowed from ₦2 trillion in the first half of 2025 to ₦1.5 trillion in the first half of 2026.

“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% to 124%,” the ministry said.

It described the figures as evidence that the government’s economic reforms were yielding results, rather than indicating that the country’s public finances were in distress.

Ministry Advocates Full-Year Assessment

The Finance Ministry also argued that Nigeria’s debt sustainability should be assessed using full-year figures rather than data covering only six months.

It cited a World Bank projection that Nigeria’s total debt service, including both interest and principal repayments, would account for 46 per cent of revenue in 2026.

The ministry said the projected full-year ratio provided a more appropriate basis for assessing the country’s debt position.

It further maintained that all Federal Government borrowing was within the limits approved by the National Assembly under the 2026 Appropriation Act and the government’s approved borrowing plan.

According to the ministry, government borrowing is conducted in line with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.

It added that information on public borrowing was regularly published by the Debt Management Office.

FG Urges Careful Interpretation of Debt Figures

The ministry said it welcomed public scrutiny of government finances but urged analysts and commentators to interpret economic figures within their proper context.

It advised those assessing Nigeria’s debt position to compare figures covering the same level of government and take into account the timing of revenue collection before reaching conclusions.

The ministry’s response comes amid continued debate over the country’s ability to meet its debt obligations while funding public services and other government commitments.

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