FG Says Report on N7.7tn Interest Payments Is Misleading
The Federal Government has rejected claims that Nigeria paid more in interest than it earned in the first half of 2026. The claim comes from a World Bank report.
The Federal Ministry of Finance made its position known on Sunday. Finance Minister Taiwo Oyedele shared the statement on X.
What the World Bank Report Says
The World Bank released its October 2026 Nigeria Development Update in Abuja on October 8. The report is titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities.”
It shows that the Federal Government earned N6.2tn between January and June. In the same period, interest payments came to N7.7tn.
In simple terms, interest alone was N1.5tn higher than revenue. That works out to about 124 per cent of what the government earned. The report does not state this percentage. It comes from dividing the two published figures.
The bank also noted that interest payments rose from 2.5 per cent of GDP to 3.1 per cent. It blamed high domestic borrowing costs. A year earlier, the figure was N5.6tn.
Opposition Reacts
The numbers quickly drew political reaction. Former Anambra State governor Peter Obi criticised the Tinubu administration over them. He said the government spent about 11 times more on interest than on capital projects.
Obi also argued that better economic indicators have not improved life for ordinary Nigerians.
Why the Ministry Disagrees
The ministry called the 124 per cent figure misleading. It gave three reasons.
1. The interest figure is too wide. The Federal Government also pays interest on loans taken for state governments. The ministry said it is unfair to compare that bill with federal revenue alone.
2. The revenue figure is too narrow. According to the ministry, it leaves out money earned by government agencies and companies that has not yet reached the Treasury.
3. Six months is too short. Some taxes are mostly collected in the second half of the year. So first-half revenue does not show the full picture.
The ministry added that debt should be judged over a full year. It pointed to the same World Bank report, which projects 2026 debt service at 46 per cent of revenue. That figure includes both interest and principal repayments.
Ministry Says Things Are Improving
The ministry said the situation is getting better. In the first half of 2025, interest was 156 per cent of revenue. This year it is about 124 per cent. That is a drop of about 32 percentage points.
Revenue grew by 72 per cent, from N3.6tn to N6.2tn. Interest payments grew by about 38 per cent, from N5.6tn to N7.7tn. The gap between the two shrank from N2tn to N1.5tn.
The ministry also said the full-year debt-service-to-revenue ratio is now below 60 per cent. It was 97 per cent before the current reforms.
“This is the result of reforms working, not a sign of fiscal distress,” it said.
However, the ministry did not release new revenue or interest figures. It also did not offer its own ratio to support its argument.
Government Defends Its Loans
The ministry said every loan taken by this administration was lawful. It added that all borrowing stayed within limits set by the National Assembly in the 2026 Appropriation Act.
It also said the borrowing followed the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003. The Debt Management Office publishes the country’s debt details regularly.
The Wider Picture
The same World Bank report also contained some positive findings. President Bola Tinubu welcomed it on October 11. He said it proves his reforms are working.
The report says the economy grew by 4.2 per cent in the first half of 2026, up from 3.9 per cent a year earlier. Nigeria’s poverty rate has stabilised for the first time since 2019. Foreign reserves rose from $45.5bn at the end of 2025 to $53.8bn by August 2026.
The bank also expects Nigeria’s total public debt to fall from 40.0 per cent of GDP in 2025 to 38.1 per cent in 2026.
Repayment of $1.25bn World Bank Loan
Separately, financing agreements show when Nigeria must start repaying a $1.25bn World Bank loan. Principal repayments begin in December 2031. The last instalment on one of the facilities falls due in June 2060.
The World Bank approved the loan in July 2026. It supports reforms to widen access to credit, improve electricity supply, boost trade competitiveness and raise government revenue.
The approval came amid public worry over Nigeria’s growing debt and calls for less external borrowing.
