Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele has revealed that Nigeria’s revenue is growing twice as fast as the country’s interest costs on debts owed.
The Minister in a statement on Sunday made this known in response to recent commentary and analyses citing the World Bank’s October 2026 Nigeria Development Update, which claimed that federal government interest payments reached 124% of revenue in the first half of 2026.
According to the statement, the Ministry dismissed the 124% figure as misleading, arguing that it relies on mismatched data, incomplete revenue bases, and flawed half-year snapshots that fail to reflect the true trajectory of Nigeria’s fiscal health.
Addressing the methodology behind the calculations, the Minister explained that the reported interest figures incorporate debt serviced by the federal government on behalf of other tiers of government, such as external loans extended to states.
“Measuring these obligations against federal revenue alone creates an inaccurate ratio, as valid comparisons require both debt and revenue figures to cover the exact same administrative level,” the statement asserted.
The Minister further noted that the revenue data utilized in such reports is incomplete, as it excludes independent revenues earned by government agencies and enterprises that have not yet been remitted to the treasury.
Highlighting seasonal revenue patterns, the Minister noted that tax inflows are historically higher in the second half of the year due to statutory payment timelines.
“This dynamic explains why the half-year interest-to-revenue ratio stood at 156% in H1 2025 before the full-year metric closed below 60%—a significant drop from the 97% recorded prior to the current administration’s fiscal reforms,” the statement read in part.
Contrasting the figures on a year-on-year basis, the Minister emphasized that the underlying fiscal position has improved substantially.
“Between the first half of 2025 and the first half of 2026, federal revenue surged by 72% jumping from ₦3.6 trillion to ₦6.2 trillion. Over the same timeframe, interest payments grew at a much slower rate of 38%, moving from ₦5.6 trillion to ₦7.7 trillion. Because revenue expanded nearly twice as fast as interest costs, the reported half-year interest-to-revenue ratio dropped by 32 percentage points from 156% to 124%, narrowing the gap between interest and revenue from ₦2.0 trillion to ₦1.5 trillion,” he said.
The Minister further stressed that a six-month snapshot is fundamentally flawed as a measure of long-term debt sustainability, which must be evaluated on an annual basis.
He highlighted that the same World Bank report projects Nigeria’s full-year 2026 debt service covering both interest and principal at 46% of revenue, serving as the appropriate benchmark for fiscal assessment.
Reassuring the public on statutory compliance, the Minister maintained that all federal borrowing remains strictly lawful.
“Every naira borrowed falls well within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan, fully complying with the Fiscal Responsibility Act of 2007 and the Debt Management Office (Establishment) Act of 2003,” he added.
