Finance Ministry rejects 124% debt interest-to-revenue ratio as misleading
The Federal Ministry of Finance has dismissed reports that interest payments on Nigeria's debt reached 124 percent of revenue in the first half of 2026, calling the interpretation misleading. The ministry said the figure included debts serviced by the Federal Government on behalf of states and other tiers, while the revenue used only accounted for federal receipts, distorting the ratio.
It stressed that a proper assessment uses full-year data, noting the World Bank projects Nigeria's total debt service (interest plus principal) for 2026 at 46 percent of revenue. The ministry also pointed out that federal revenue rose 72 percent year-on-year, from N3.6 trillion in H1 2025 to N6.2 trillion in H1 2026, while interest payments increased 38 percent, from N5.6 trillion to N7.7 trillion over the same period.
Regarding borrowing, the ministry confirmed every naira borrowed stayed within limits approved by the National Assembly under the 2026 Appropriation Act and complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003, with borrowing details regularly published by the Debt Management Office.
Given the full-year projection of 46 percent debt service and the legal borrowing framework, how should Nigerians evaluate the government's fiscal sustainability when confronted with short-term interest-to-revenue claims?