The Federal Government through the Ministry of Finance has rejected claims that it spent 124 per cent of its revenue on debt interest payments in the first half of 2026.
It described the interpretation of the figures as misleading.
The ministry said the calculation failed to account for differences in the scope of government debt obligations and the revenue used for comparison. It also argued that a six-month assessment does not provide a complete picture of Nigeria’s debt sustainability.
In a statement issued on Sunday, October 18, the ministry said the analysis, attributed to the World Bank’s October 2026 Nigeria Development Update, included debt serviced by the Federal Government on behalf of other tiers of government, including external loans obtained by state governments.
According to the ministry, comparing such obligations with federal revenue alone exaggerates the debt interest-to-revenue ratio because the figures do not cover the same level of government.
It also argued that the revenue figure used in the calculation was incomplete because it excluded independent revenue earned by government agencies and enterprises but not yet remitted to the Treasury.
The ministry added that government revenue typically increases in the second half of the year because of the statutory timing of certain tax payments.
In its argument, the ministry cited the 156 per cent interest-to-revenue ratio recorded in the first half of 2025, noting that the full-year debt-service-to-revenue ratio subsequently fell below 60 per cent.
It said the full-year figure represented a significant improvement from the 97 per cent ratio recorded before the current administration’s economic reforms.
“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,” the statement read.
The ministry also highlighted improvements in revenue collection between the first half of 2025 and the corresponding period in 2026.
It said federal revenue increased by 72 per cent, from N3.6 trillion to N6.2 trillion, while interest payments rose by 38 per cent, from N5.6 trillion to N7.7 trillion.
According to the ministry, the faster growth in revenue reduced the interest-to-revenue ratio by 32 percentage points, from 156 per cent to 124 per cent, within one year.
It added that the difference between interest payments and revenue narrowed from N2 trillion in the first half of 2025 to N1.5 trillion in the corresponding period of 2026.
The ministry maintained that these figures reflected progress under the government’s economic reforms rather than evidence of worsening fiscal conditions.
It further argued that debt sustainability should be assessed using full-year figures rather than a six-month snapshot.
Citing the World Bank’s projections, the ministry said Nigeria’s debt service, covering both interest and principal repayments, was expected to account for 46 per cent of revenue in 2026.
The ministry described the projected full-year ratio as a more appropriate benchmark for assessing the country’s debt position.
It also insisted that all federal government borrowing was lawful and had been approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
According to the ministry, the government conducts its borrowing in accordance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, with borrowing activities regularly published by the Debt Management Office.
“The Ministry welcomes informed scrutiny of public finances. 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,” the statement added.