FG Challenges World Bank’s Debt Assessment, Cites 72% Revenue Growth

The Federal Government has challenged the World Bank’s assessment of Nigeria’s debt burden, arguing that the reported 124 per cent interest-to-revenue ratio for the first half of 2026 does not fully reflect the country’s fiscal position.

The Federal Ministry of Finance said the calculation presented an incomplete picture because it included debt obligations serviced on behalf of state governments while comparing them with revenue attributed only to the Federal Government.

The disagreement followed the World Bank’s latest Nigeria Development Update, which reported that interest payments exceeded federal revenue during the first six months of the year. The figures showed revenue of ₦6.2 trillion against interest payments of ₦7.7 trillion, producing a gap of ₦1.5 trillion.

However, the ministry argued that the comparison did not account for all relevant revenue and debt obligations. It said the interest figure included external loans to states serviced by the Federal Government, making a direct comparison with federal revenue alone misleading.

The ministry also maintained that the revenue figure excluded independent income already earned by government agencies and enterprises but not yet remitted to the Treasury. It added that some tax payments are typically concentrated in the second half of the year, meaning a six-month assessment might not adequately capture the government’s annual revenue position.

To support its argument, the ministry highlighted changes in revenue and interest payments between the first halves of 2025 and 2026. Federal revenue rose by 72 per cent, from ₦3.6 trillion to ₦6.2 trillion, while interest payments increased by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion.

According to the ministry, the interest-to-revenue ratio consequently fell from 156 per cent in the first half of 2025 to 124 per cent in the corresponding period of 2026. It also said the difference between interest payments and revenue narrowed from ₦2 trillion to ₦1.5 trillion.

The ministry described these changes as evidence that revenue was growing faster than interest costs, rather than proof of worsening fiscal conditions.

It further argued that Nigeria’s debt sustainability should be assessed using full-year figures rather than a six-month snapshot. Citing the World Bank’s own projection, the government said total debt service, covering both interest and principal repayments, was expected to amount to 46 per cent of revenue for the full year 2026.

The government also defended its borrowing programme, stating that federal borrowing remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan. It said borrowing was being conducted in line with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.

Despite the government’s objections, the figures have renewed attention on the relationship between Nigeria’s revenue collection, debt obligations and available funds for public spending.

The key issue in the dispute is how the debt burden is measured: the World Bank’s first-half figures highlight the pressure of interest payments relative to reported federal revenue, while the Finance Ministry argues that the comparison leaves out relevant revenue and combines obligations across different tiers of government.

The ministry has called for greater care in interpreting public finance data, insisting that debt and revenue figures should cover the same level of government and be assessed in their proper fiscal context.

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