The Federal Government has faulted the recent assessment by the World Bank which claimed that interest payments consumed 124 per cent of its revenue in the first half of 2026, describing the calculation as misleading and not reflective of the true fiscal position.

The government said the report, which has generated widespread concerns and debates among economists and members of the public, was based on incomplete data and wrong assumptions about the country’s revenue and debt profile.

The Federal Ministry of Finance, in a detailed statement issued on the matter, clarified that the N7.7 trillion interest payment figure quoted by the World Bank included debt service payments that were made on behalf of state governments.

According to the ministry, the figure does not represent interest payment by the Federal Government alone, but also captures payments made to service debts owed by sub-national governments, which are often deducted at source from their allocations.

The ministry further explained that the N6.2 trillion revenue figure used by the World Bank in its calculation excluded some major streams of income that accrue to the Federal Government.

It noted that if all revenues belonging to the Federal Government were properly captured, the total revenue would be significantly higher than the N6.2 trillion quoted in the World Bank report.

The Finance Ministry argued that by including payments made on behalf of states in the expenditure side while excluding some federal income on the revenue side, the calculation inevitably resulted in an inflated and misleading debt service-to-revenue ratio.

It stressed that such methodology does not give a true picture of the Federal Government’s actual debt servicing burden and its capacity to meet its financial obligations.

The ministry therefore described the World Bank’s conclusion that interest payments gulped 124 per cent of Federal Government revenue in the first half of 2026 as inaccurate and capable of creating unnecessary panic among investors and the general public.

Providing its own figures, the ministry said Federal Government revenue actually recorded significant improvement in the first half of 2026 when compared to the corresponding period in 2025.

It disclosed that federal revenue increased by 72 per cent, rising from N3.6 trillion in the first half of 2025 to N6.2 trillion in the same period of 2026, a development which it said shows steady progress in revenue generation efforts.

The ministry attributed the increase in revenue to ongoing reforms in tax administration, improved oil revenue, better collection of non-oil revenue and blocking of leakages in government finances.

On the other hand, it admitted that interest payments increased in the period under review, but said the increase was not as alarming as portrayed in the World Bank report.

According to the ministry, interest payments rose by 38 per cent in the first half of 2026, reflecting both higher debt stock and the impact of monetary policy tightening and exchange rate adjustments.

It explained that while debt service remains high, the government has been taking deliberate steps to manage its debt portfolio more efficiently and to ensure that borrowed funds are channeled into productive sectors that can generate returns.

The ministry maintained that contrary to the impression created by the World Bank report, the Federal Government’s fiscal position has actually improved in recent months.

It said the improvement is evident in higher revenue, better budget performance and more prudent management of public resources, which are part of the broader economic reform agenda of the current administration.

To buttress its point, the ministry cited a projection also contained in the same World Bank report, which estimated that Nigeria’s full-year debt service would amount to 46 per cent of revenue.

It argued that if the full-year projection is 46 per cent, it does not logically follow that the half-year figure would be as high as 124 per cent, unless there were distortions in the half-year calculation.

The ministry said the World Bank’s full-year projection of 46 per cent is a more realistic assessment of Nigeria’s debt service burden and shows that the fiscal situation is not as dire as the 124 per cent figure suggests.

It therefore called on members of the public, investors and analysts to disregard the 124 per cent claim and to focus on the broader trajectory of fiscal reforms and improvements in revenue generation.

The Federal Government also assured Nigerians that it remains committed to fiscal discipline, debt sustainability and transparency in the management of public finances.

It said efforts are ongoing to further increase revenue through widening of the tax net, improving compliance, enhancing collections from Government-Owned Enterprises and optimizing returns from oil and other natural resources.

The ministry added that on the expenditure side, the government is working to reduce the cost of governance, eliminate wasteful spending and ensure that borrowed funds are used strictly for capital and growth-enhancing projects.

It also reiterated its commitment to continue engaging with international financial institutions like the World Bank and the International Monetary Fund, IMF, but stressed that such engagements must be based on accurate and comprehensive data.

According to the ministry, constructive engagement with development partners is important for economic planning and policy formulation, but it should not lead to misrepresentation of the country’s economic realities.

Many economic experts who have reacted to the controversy have also called for more clarity in the computation of debt service-to-revenue ratios and for better coordination between government agencies and international institutions in data sharing.

They noted that accurate data is crucial for investor confidence and for policy decisions, and urged both the Federal Government and the World Bank to harmonize their methodologies to avoid confusion.

As at the time of filing this report, the World Bank is yet to issue an official response to the clarification made by the Federal Ministry of Finance regarding its assessment of Nigeria’s debt service in the first half of 2026.