The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt position, describing reports that interest payments exceeded federal revenue in the first half of 2026.
The Federal Ministry of Finance, in a statement issued on Sunday and shared by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the assessment failed to account for differences in the scope of government revenue and debt obligations.
The dispute followed the World Bank’s October 2026 Nigeria Development Update, which reported that the Federal Government generated N6.2tn in revenue while paying N7.7tn in interest during the first half of the year.
An analysis of the figures published by The PUNCH showed that interest payments represented approximately 124.2 per cent of federal revenue, exceeding revenue by N1.5tn.
However, the Finance Ministry argued that the interest figure included debt obligations serviced by the Federal Government on behalf of state governments, including external loans, making a direct comparison with federal revenue misleading.
The ministry also said the revenue figure excluded income generated by government agencies and enterprises but not yet remitted to the Treasury. It added that some taxes were collected predominantly in the second half of the year, making first-half figures insufficient for assessing annual debt sustainability.
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 said federal revenue increased by 72 per cent, from N3.6tn in the first half of 2025 to N6.2tn in the same period of 2026, while interest payments rose by 38 per cent, from N5.6tn to N7.7tn.
The ministry maintained that the declining ratio demonstrated progress in the government’s fiscal reforms rather than evidence of worsening financial conditions.
It also argued that the World Bank’s projected full-year 2026 debt-service-to-revenue ratio of 46 per cent, covering both principal and interest payments, provided a more appropriate basis for assessing the country’s debt position.
The Federal Government further defended its borrowing programme, insisting that loans obtained under the current administration were lawful and approved by the National Assembly.
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It said the borrowing programme complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, adding that information on the country’s debt obligations was regularly published by the Debt Management Office.
Despite disputing the World Bank’s assessment, the ministry did not provide revised revenue and interest-payment figures or an alternative ratio to substantiate its position.
World Bank’s $1.25bn Loan
Meanwhile, Nigeria is scheduled to begin repaying the principal on a $1.25bn World Bank loan in December 2031, with the final payment on one of the facilities due in June 2060.
The financing, secured under the Nigeria Actions for Investment and Jobs Acceleration Development Policy Financing programme, is intended to support reforms aimed at improving access to credit, expanding electricity supply, strengthening trade competitiveness and increasing government revenue.
The facility comprises a $750m concessional credit from the International Development Association (IDA) and a $500m loan from the International Bank for Reconstruction and Development (IBRD), both members of the World Bank Group.
Under the repayment agreements, principal payments on both facilities will begin on December 15, 2031. The IDA credit is scheduled to be fully repaid by June 2051, while the IBRD loan will run until June 2060.
Nigeria will repay $18.75m in principal every six months on the IDA facility, equivalent to $37.5m annually during full repayment years, excluding interest and other charges.
The IBRD facility provides for regular principal instalments of approximately $8.6m every six months, followed by a final payment of about $9.8m.
Combined, the facilities will require principal repayments of approximately $27.35m every six months between December 2031 and June 2051.
The agreements also include interest and commitment charges, meaning the total cost of borrowing will depend on applicable rates and other contractual provisions.
The loans support reforms covering financial services, electricity, trade, taxation, agriculture and digital infrastructure. Their disbursement is subject to agreed policy measures and the maintenance of an adequate macroeconomic framework.
The repayment schedules will extend across several administrations, with the final principal payment on the IBRD facility falling due nearly 34 years after the agreements were signed.
