The Federal Government has rejected the World Bank’s concerns over Nigeria’s debt sustainability following ₦7.7 trillion in interest payments recorded in the first half of 2026, describing the assessment as misleading.

The Federal Ministry of Finance stated its position in a statement issued on Sunday and shared on X by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.

The World Bank, in its October 2026 Nigeria Development Update (NDU), had raised concerns over the country’s debt servicing-to-revenue ratio, which stood at 124 per cent during the first six months of the year.

However, the ministry argued that the figure did not accurately reflect the government’s fiscal position, insisting that revenue growth had outpaced the increase in interest payments.

According to the ministry, the calculation was based on incomplete revenue figures and included debt obligations serviced by the Federal Government on behalf of state governments, thereby distorting the reported ratio.

It explained that the interest payments covered external loans owed by other tiers of government, while the revenue figure used for comparison excluded independent revenue earned by government agencies and enterprises but not yet remitted to the Treasury.

The ministry also noted that certain taxes were typically collected in greater amounts during the second half of the year because of statutory payment schedules, making first-half figures insufficient for assessing annual debt obligations.

To support its position, the ministry cited the 2025 fiscal performance, stating that Nigeria’s interest-to-revenue ratio stood at 156 per cent in the first half of that year, while the full-year debt-service-to-revenue ratio fell below 60 per cent, compared with 97 per cent before the current administration’s reforms.

It described the development as evidence of progress in the government’s fiscal reforms.

The ministry further disclosed that federal revenue increased by 72 per cent between the first half of 2025 and the corresponding period in 2026, rising from ₦3.6 trillion to ₦6.2 trillion.

In contrast, interest payments rose by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion over the same period.

It maintained that revenue was growing almost twice as fast as interest costs, resulting in a decline in the interest-to-revenue ratio from 156 per cent to 124 per cent.

The ministry added that the gap between interest payments and revenue narrowed from ₦2 trillion in the first half of 2025 to ₦1.5 trillion in the first half of 2026.

According to the ministry, the figures demonstrate that the government’s reforms are improving fiscal performance rather than signalling financial distress.

It also maintained that debt sustainability should be evaluated using full-year figures rather than data covering only six months.

The ministry noted that the World Bank’s report projected Nigeria’s full-year 2026 debt service, covering both interest and principal repayments, at 46 per cent of revenue, describing this as a more appropriate benchmark for assessing the country’s debt position.

On borrowing, the ministry insisted that all Federal Government loans remained within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.

It added that borrowing activities complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, noting that details were regularly published by the Debt Management Office.

While acknowledging the importance of public scrutiny of government finances, the ministry urged analysts and commentators to interpret fiscal figures within their proper context and ensure that debt obligations and revenue were compared on a consistent basis.

The disagreement underscores the ongoing debate over Nigeria’s debt burden, with the World Bank highlighting the pressure of interest payments on government revenue and the Federal Government maintaining that rising revenue and the broader annual fiscal outlook offer a more accurate picture of the country’s debt sustainability.