FG disputes World Bank debt-interest ratio, says 124% calculation is misleading
The Federal Government has challenged an assessment based on the World Bank’s latest Nigeria Development Update that interest payments amounted to about 124% of federal revenue in the first half of 2026.
The Federal Ministry of Finance says the calculation gives a misleading picture of Nigeria’s fiscal position because it compares debt obligations covering more than one tier of government with an incomplete federal revenue base.
The dispute centers on two first-half 2026 figures: about ₦6.2 trillion in federal revenue and ₦7.7 trillion in interest payments.
Those figures produce a ratio of roughly 124%.
The ministry argues that the comparison is not like-for-like.
Why the government disputes the calculation
The Finance Ministry says the interest figure includes debt serviced by the Federal Government on behalf of other tiers of government, including some external loans to states.
It argues that measuring those obligations against federal revenue alone overstates the ratio.
The ministry also says the revenue figure excludes some income earned by government agencies and enterprises that had not yet been remitted to the Treasury.
It further argues that some major tax collections are concentrated in the second half of the year, making a six-month revenue figure an incomplete basis for judging annual debt sustainability.
Revenue grew faster than interest payments, ministry says
The government says federal revenue rose from about ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the same period of 2026.
It says interest payments increased from about ₦5.6 trillion to ₦7.7 trillion over the same period.
On that basis, the ministry says revenue grew faster than interest costs, while the gap between revenue and interest payments narrowed from about ₦2 trillion to ₦1.5 trillion.
The ministry presents that as evidence of an improving fiscal position.
That remains the government’s interpretation of the figures.
What the World Bank figures show
The World Bank’s October 2026 Nigeria Development Update reported the first-half revenue and interest-payment figures underpinning the disputed calculation.
An analysis of those figures produces an interest-to-revenue ratio of approximately 124%.
The current dispute is therefore not over whether the ₦7.7 trillion and ₦6.2 trillion figures appear in the fiscal picture, but over whether they should be directly compared in that form.
Government prefers a full-year measure
The Finance Ministry says debt sustainability should be assessed on a full-year basis rather than from the first six months alone.
It points to a World Bank full-year 2026 projection putting debt service, including interest and principal, at about 46% of revenue, and argues that this is a more appropriate benchmark.
But in the material reviewed by IDNN, the ministry did not provide a revised first-half ratio that adjusts both the revenue and interest figures onto the same accounting basis.
That leaves the methodology dispute unresolved.
The accountability question
The central public-interest issue is whether the government can publish a transparent reconciliation showing:
- what portion of the ₦7.7 trillion interest figure relates strictly to Federal Government debt;
- what portion relates to obligations serviced for states or other tiers;
- which revenues were excluded from the ₦6.2 trillion figure;
- and what the resulting like-for-like H1 interest-to-revenue ratio would be.
Without those reconciled figures, the public is left with two competing interpretations of the same fiscal period.
The World Bank figures point to a very heavy first-half interest burden.
The Federal Government argues that the ratio derived from them overstates that burden because the debt and revenue measures are not directly comparable.
For now, the narrow verified position is this: the Federal Government disputes the methodology behind the 124% calculation but has not yet publicly resolved that dispute with a directly comparable replacement calculation in the material reviewed by IDNN.