FG: Interest payments didn’t exceed revenue in H1 2026

The Federal Government has dismissed claims that its interest payments exceeded its revenue in the first half of 2026, describing the interpretation of recent World Bank data as misleading and lacking proper context.

The Federal Ministry of Finance made this known in a statement issued on Sunday, October 18, 2026, saying reports claiming that interest payments reached 124 per cent of revenue were based on incomplete revenue figures and comparisons that did not reflect Nigeria’s actual fiscal position.

The ministry stated that the interest payment figure cited in the World Bank’s October 2026 Nigeria Development Update included debts serviced by the federal government on behalf of states and other tiers of government, while the revenue figure used in the comparison covered only federal revenue.

It also noted that the revenue data excluded independent revenues already generated by government agencies and enterprises but yet to be remitted into the Treasury.

The ministry said using such mismatched figures exaggerated the debt-service-to-revenue ratio.

The ministry said: “The reported revenue is also incomplete. It excludes independent revenue already earned by government agencies and enterprises but not yet remitted to the Treasury.

“In addition, 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% in H1 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60%, down from 97% before the reforms. This is a clear sign of the progress delivered by the current administration’s reforms.”

It disclosed that federal revenue increased by 72 per cent from N3.6 trillion in the first half of 2025 to N6.2 trillion in the corresponding period of 2026, while interest payments rose by a slower 38 per cent from N5.6 trillion to N7.7 trillion.

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The ministry stated: “Between the first half of 2025 and the first half of 2026, federal revenue rose by 72%, from ₦3.6 trillion to ₦6.2 trillion. Interest payments rose by a much slower 38%, from ₦5.6 trillion to ₦7.7 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% to 124%, and the gap between interest and revenue narrowed from ₦2.0 trillion to ₦1.5 trillion. This is the result of reforms working, not a sign of fiscal distress.”

The ministry further noted that debt sustainability should be assessed using full-year data rather than six-month figures.

It said the same World Bank report projected Nigeria’s full-year 2026 debt service, covering both interest and principal repayments, at 46 per cent of revenue, describing this as the more appropriate measure of the country’s fiscal health.

The ministry added that all borrowings by the federal government were lawful and within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.

The ministry said every borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, while details were regularly published by the Debt Management Office.

While welcoming public scrutiny of government finances, the ministry urged analysts and commentators to interpret fiscal data carefully and compare like-for-like figures before drawing conclusions.

“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.