The Federal Ministry of Finance has disputed the World Bank’s assessment that federal interest payments reached 124% of revenue in the first half of 2026. The ministry said the calculation includes debt serviced on behalf of states. It said comparing those payments with federal revenue alone overstates the ratio.
Nigeria’s debt service burden has dominated fiscal debate since the 2023 reforms. The subsidy removal raised revenue. It also raised costs. The Debt Management Office has restructured parts of the domestic portfolio. The interest-to-revenue ratio has become the central metric for fiscal sustainability. In the first half of 2025, the ministry says the ratio stood at 156%. It says it has since improved.
The ministry said federal revenue rose 72% year-on-year to ₦6.2 trillion. Interest payments increased 38% to ₦7.7 trillion. On its own figures, the ratio is 124%. That is lower than 156% in the same period of 2025. The ministry described that as an improvement, not a crisis.
It argued that the World Bank’s calculation ignores some government agency revenues. It said collections are typically higher in the second half of the year. It said the World Bank projects full-year 2026 debt service, including principal, at 46% of revenue. It maintained that borrowing complies with approved limits and relevant fiscal laws.
The technical dispute is real. Debt serviced for states is a federal obligation. Whether it belongs in a federal revenue ratio depends on the question being asked. If the question is fiscal solvency, the consolidated figure matters. If the question is federal budget pressure, the federal figure matters.
The World Bank’s framing is starker. A 124% ratio means interest alone exceeds revenue. That implies borrowing to pay interest. The ministry’s framing is comparative. It says the ratio is falling. Both can be true. The absolute burden remains heavy.
Winners: The ministry, which defends its record. Bondholders, who gain reassurance. The Federal Government, which gains a rebuttal. Losers: The World Bank, whose methodology is challenged. Nigerians, who see a technical argument masking a real burden. Capital projects, which compete with interest payments. The fiscal debate, which becomes a dispute over denominators.
Bottom Line: The ministry says the ratio is 124% and improving. The World Bank says it is 124% and alarming. They differ on what counts, not on the burden. Interest still consumes more than revenue. That is the fact. The denominator debate does not change it. Borrowing must slow. Revenue must rise.