Finance Ministry Disputes 124% Interest-to-Revenue Ratio for H1 2026

The Federal Ministry of Finance has disputed claims that Federal Government interest payments reached 124 per cent of revenue in the first half of 2026, describing the figure as misleading due to differences in the scope of debt obligations and revenue calculations.

In a press release issued in Abuja on Sunday, October 18, 2026, the ministry said the calculation cited in recent public commentary, based on the World Bank’s October 2026 Nigeria Development Update, compared interest payments that included obligations serviced on behalf of other tiers of government with federal revenue alone.

It also argued that the revenue figure excluded independent revenue earned by government agencies and enterprises but not yet remitted to the Treasury.

According to the ministry, the timing of statutory tax payments also means that government revenue is typically higher in the second half of the year, making half-year figures an incomplete measure of the country’s fiscal position.

The ministry cited the 2025 figures as an example, stating that the interest-to-revenue ratio stood at 156 per cent in the first half of that year, while the full-year debt-service-to-revenue ratio fell below 60 per cent, compared with 97 per cent before the reforms.

Providing a year-on-year comparison, the ministry said federal revenue increased by 72 per cent, from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026.

Interest payments, however, rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion over the same period.

It 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.

The ministry attributed the changes to ongoing fiscal reforms, arguing that the figures indicated revenue was growing faster than interest costs.

It further maintained that debt sustainability should be assessed using full-year figures rather than a six-month snapshot.

Citing the World Bank’s report, the ministry said Nigeria’s projected full-year debt service, covering both interest and principal repayments, stood at 46 per cent of revenue for 2026.

On government borrowing, the ministry said all Federal Government borrowing was within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.

It added that borrowing activities 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 covering the same level of government, consider the context of revenue collection and seek clarification where data remained unclear.