Nigeria’s Federal Government revenue rose from ₦3.6 trillion to ₦6.2 trillion in the first half of 2026, outpacing the increase in interest payments, which reached ₦7.7 trillion.
The Federal Ministry of Finance disclosed this in a press release issued in Abuja on Sunday, 18 October, in response to public claims that interest payments amounted to 124 per cent of federal revenue during the six-month period.
The ministry said the figure gave an incomplete picture of the government’s finances because the calculation included debts serviced for other tiers of government but compared them with federal revenue alone.
It also said the revenue figure excluded earnings by government agencies and enterprises that had not yet been paid into the Treasury.
Revenue grows faster than interest payments
The ministry reported that federal revenue increased by 72 per cent between January and June 2025 and the same period in 2026. Interest payments rose by 38 per cent over those periods.
Revenue climbed from ₦3.6 trillion to ₦6.2 trillion, while interest payments increased from ₦5.6 trillion to ₦7.7 trillion.
The difference between interest payments and revenue consequently narrowed from ₦2 trillion in the first half of 2025 to ₦1.5 trillion in the first half of 2026.
The ministry also reported a fall in the interest-to-revenue ratio, which measures interest payments against government income. The ratio dropped from 156 per cent in the first half of 2025 to 124 per cent in the first half of 2026.
It attributed the change to the Federal Government’s reforms, saying revenue was rising almost twice as fast as interest costs.
The ministry also cited the full-year figures for 2025, when the debt-service-to-revenue ratio fell below 60 per cent, compared with 97 per cent before the reforms.
It said the first-half figures did not capture the full pattern of government income because certain tax payments are usually made in the second half of the year.
The ministry maintained that comparing the interest bill with federal revenue alone gave a misleading result when the debt figure included loans serviced on behalf of state governments and other tiers of government.
Ministry cites full-year debt projection
The ministry said a six-month comparison could not, on its own, determine whether Nigeria’s debt was sustainable.
It referred to the World Bank’s October 2026 Nigeria Development Update, which projects that the Federal Government’s debt service for the full year will amount to 46 per cent of revenue.
Debt service covers both interest payments and the repayment of borrowed money. The ministry presented the projected full-year ratio as a more suitable measure than the first-half interest-to-revenue figure.
It also defended the legality of federal borrowing, stating that every naira borrowed fell within limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
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The ministry said borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
It further stated that the Debt Management Office publishes borrowing information regularly.
The ministry welcomed scrutiny of public finances but asked analysts and commentators to compare figures covering the same level of government and consider the period covered by the data.
WHAT READERS SHOULD KNOW
The 124 per cent figure refers to interest payments compared with federal revenue in the first half of 2026. It does not represent the ministry’s projected full-year debt-service ratio.
The ministry’s figures show that interest payments exceeded federal revenue by ₦1.5 trillion during the first six months of 2026. It says the comparison does not include all government earnings and covers debt obligations that extend beyond the Federal Government alone.
The World Bank’s projected 46 per cent ratio covers full-year debt service, including interest and principal repayments. The ministry used this projection to explain why a half-year interest-to-revenue figure should not be treated as a complete measure of Nigeria’s debt position.
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