By our Reporter
The Federal Ministry of Finance has disputed reports that the Federal Government’s interest payments on loans reached 124 per cent of revenue in the first half of 2026, describing the figure as misleading due to differences in the revenue and debt figures used in the calculation.
In a press release issued in Abuja on Sunday, October 18, 2026, the ministry said recent analyses citing the World Bank’s October 2026 Nigeria Development Update had failed to account for important factors affecting the reported ratio.
According to the ministry, the interest payment figure includes debts serviced by the Federal Government on behalf of other tiers of government, including external loans to states, while the revenue figure used in the calculation excludes some independent revenue earned by government agencies and enterprises but yet to be remitted to the Treasury.
It added that government revenue typically increases in the second half of the year because of the statutory timing of certain tax payments, arguing that comparing half-year interest payments with an incomplete revenue base could distort the fiscal picture.
The ministry cited figures showing that the interest-to-revenue ratio stood at 156 per cent in the first half of 2025, while the full-year 2025 debt-service-to-revenue ratio was below 60 per cent, compared with 97 per cent before the current administration’s reforms.
It also said Federal Government revenue rose by 72 per cent, from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026, while interest payments increased by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.
The ministry said the difference between interest payments and revenue consequently narrowed from ₦2 trillion to ₦1.5 trillion, while the interest-to-revenue ratio declined by 32 percentage points, from 156 per cent to 124 per cent.
It described the development as evidence of progress from the government’s reforms, rather than an indication of fiscal distress.
The ministry further argued that debt sustainability should be assessed using full-year figures rather than a six-month snapshot. It cited the World Bank’s projection that Nigeria’s full-year 2026 debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue.
On borrowing, the ministry maintained that all Federal Government loans were 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, noting that borrowing information was regularly published by the Debt Management Office.
The ministry said it welcomed scrutiny of public finances but urged analysts and commentators to compare figures on a like-for-like basis, consider the context of published data and seek clarification where necessary.
