The Federal Ministry of Finance has challenged the use of a 124 per cent interest-to-revenue figure to assess Nigeria’s debt burden, saying the calculation compares obligations across different levels of government with incomplete federal revenue.
In a statement issued on Sunday, the ministry said the interest payments include debt the Federal Government services for states, including external loans. It argued that measuring those payments against federal revenue alone overstates the burden.
The response followed reporting based on the World Bank’s October 2026 Nigeria Development Update. Punch said its calculation put interest payments of N7.7 trillion against federal revenue of N6.2 trillion in the first half of 2026. The newspaper noted that the resulting percentage was its own calculation, rather than a ratio expressly stated in the World Bank report.
Why the ministry disputes the comparison
The ministry said the revenue figure excludes income already earned by government agencies and enterprises but not yet remitted to the treasury. It also said statutory payment schedules mean more revenue is typically recorded in the second half of the year.
According to the statement, federal revenue rose from N3.6 trillion in the first half of 2025 to N6.2 trillion in the same period of 2026, while interest payments increased from N5.6 trillion to N7.7 trillion. The ministry presented that comparison as evidence that revenue was growing faster than interest costs.
It said debt sustainability should be assessed over a full year, not from a six-month snapshot. Citing the World Bank report, it put projected full-year 2026 debt service at 46 per cent of revenue. That projection covers both interest and principal, rather than interest alone.
The ministry also said government borrowing remained within National Assembly approvals and the relevant borrowing laws.
Punch reported that the statement did not supply revised revenue and interest-payment totals or an alternative first-half ratio to replace the disputed calculation.
Sources: Punch, Premium Times
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