Finance Ministry says revenue growth outpaces debt interest

The Federal Ministry of Finance has defended Nigeria’s debt position, saying federal revenue is growing faster than interest payments and arguing that claims that interest costs reached 124% of revenue in the first half of 2026 are misleading.

In a statement issued in Abuja on Oct. 18, the ministry said the calculation, cited in public commentary based on the World Bank’s October 2026 Nigeria Development Update, combines federal interest payments with revenue figures that do not capture the full picture.

According to the ministry, the interest figure includes external loans the Federal Government services on behalf of state governments, while the revenue calculation excludes some independent earnings of government agencies and enterprises that have not yet been remitted to the Treasury.

The ministry also said revenue typically rises in the second half of the year because of the timing of certain tax payments, making half-year figures an incomplete measure of the country’s fiscal position.

The ministry said federal revenue rose by 72%, from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the same period of 2026.

Interest payments increased by 38%, from ₦5.6 trillion to ₦7.7 trillion, reducing the interest-to-revenue ratio from 156% to 124%.

The ministry said the gap between revenue and interest payments also narrowed from ₦2 trillion to ₦1.5 trillion, describing the figures as evidence that economic reforms are improving revenue performance.

“The conclusion is misleading,” the ministry said, urging analysts to compare figures covering the same level of government and interpret debt statistics in context.

It also cited a World Bank projection that total debt service, including interest and principal repayments, would amount to 46% of revenue for the full year in 2026. The ministry said full-year figures provide a more appropriate basis for assessing debt sustainability.

The ministry maintained that federal borrowing complies with limits approved by the National Assembly and relevant laws, including the Fiscal Responsibility Act of 2007.

The ministry’s statement presents its interpretation of the figures; the 124% half-year interest ratio and the projected 46% full-year debt-service ratio cover different periods and measures.