The Federal Ministry of Finance has faulted claims that the Federal Government spent 124 per cent of its revenue on interest payments in the first half of 2026, describing the interpretation of the figures as misleading and insisting that key fiscal indicators show improving revenue performance.
The ministry, in a press release issued in Abuja on Sunday, October 18, 2026, said recent commentaries based on the World Bank’s October 2026 Nigeria Development Update had presented an incomplete picture of the government’s debt-servicing position.
It argued that the reported ratio was calculated using interest payments that included debt serviced on behalf of other tiers of government, including external loans to states, against federal revenue alone.
According to the ministry, comparing debt obligations covering different levels of government with revenue accruing only to the Federal Government overstates the ratio.
It also noted that the revenue figure used in the calculation excluded independent revenue already earned by government agencies and enterprises but yet to be remitted to the Treasury.
The ministry further explained that government revenue typically increases in the second half of the year because of the statutory timing of certain tax payments, making a six-month comparison an incomplete basis for assessing the country’s fiscal position.
To support its argument, it cited the 2025 fiscal performance, noting 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, compared with 97 per cent before the current administration’s reforms.
The ministry described the figures as evidence of progress made through ongoing fiscal reforms.
Providing a year-on-year comparison, it disclosed that 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.
Interest payments, however, rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion within the same period.
It said the faster growth in revenue had reduced the interest-to-revenue ratio by 32 percentage points, from 156 per cent to 124 per cent, while narrowing the gap between interest payments and revenue from ₦2 trillion to ₦1.5 trillion.
According to the ministry, the trend demonstrates that revenue is growing almost twice as fast as interest costs, describing the development as evidence of reforms yielding results rather than an indication of fiscal distress.
The ministry also cautioned against using half-year figures as a definitive measure of Nigeria’s debt sustainability, arguing that the assessment should be based on full-year fiscal performance.
It cited the World Bank’s projection that Nigeria’s total debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue for the full year 2026.
The ministry described the projected full-year ratio as a more appropriate benchmark for assessing the country’s debt-servicing position, warning against drawing conclusions from incomplete data.
On borrowing, the ministry maintained that all Federal Government loans were lawful and obtained within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
It added that government borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, with borrowing information published regularly by the Debt Management Office.
While welcoming scrutiny of public finances, the ministry urged analysts and commentators to exercise diligence in interpreting fiscal data, insisting that comparisons must be based on consistent figures and assessed within the appropriate economic context.
It also encouraged stakeholders to seek clarification where data appeared unclear, rather than draw conclusions from figures it described as incomplete or mismatched.
