Finance Ministry Disputes Claim That Interest Payments Exceeded Federal Revenue by 124%
The Federal Ministry of Finance has dismissed reports suggesting that Federal Government interest payments consumed 124 per cent of revenue in the first half of 2026, describing the interpretation of the figures as misleading.
The ministry’s response followed the World Bank’s October 2026 Nigeria Development Update, which reported Federal Government revenue of N6.2tn and interest payments of N7.7tn between January and June 2026.
An analysis of the published figures by The PUNCH showed that interest payments amounted to approximately 124.2 per cent of revenue, exceeding the revenue figure by N1.5tn. However, the World Bank report did not expressly state the ratio.
In its response, the ministry argued that the calculation compared debt obligations covering multiple tiers of government with revenue attributed solely to the Federal Government, thereby overstating the pressure on federal finances.
“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states,” the ministry said, adding that debt obligations and revenue must cover the same level of government for the ratio to provide a meaningful assessment.
The ministry also faulted the use of first-half revenue figures, arguing that the calculation excluded income earned by government agencies and enterprises but not yet remitted to the Treasury.
It further explained that statutory payment schedules meant some taxes were collected predominantly in the second half of the year, making first-half revenue an incomplete measure for assessing annual debt obligations.
According to the ministry, the interest-to-revenue ratio declined from 156 per cent in the first half of 2025 to approximately 124 per cent in the corresponding period of 2026.
It also claimed that the full-year debt-service-to-revenue ratio had fallen below 60 per cent, compared with 97 per cent before the current administration’s reforms, describing the development as evidence of improved fiscal management.
The ministry said Federal Government revenue increased by 72 per cent, rising from N3.6tn in the first half of 2025 to N6.2tn in the same period of 2026.
Interest payments, meanwhile, rose by 38 per cent, from N5.6tn to N7.7tn over the same period.
Despite the ministry’s defence, the figures highlight the importance of distinguishing between the Federal Government’s own revenue and the broader debt obligations it services when assessing Nigeria’s fiscal position.
