Fed govt revenue grows faster than interest payments

The Federal Government’s revenue rose by 72 per cent to N6.2 trillion in the first half of 2026 from N3.6 trillion in the corresponding period of 2025, while interest payments increased by 38 per cent to N7.7 trillion from N5.6 trillion.

The Federal Ministry of Finance disclosed this on Sunday while responding to public commentary on the World Bank’s October 2026 Nigeria Development Update, which put federal interest payments at 124 per cent of revenue in the first half of this year.

The ministry said the growth in revenue had outpaced the increase in interest payments, reducing the interest-to-revenue ratio from 156 per cent in the first half of 2025 to 124 per cent in the corresponding period of 2026.
It added that the difference between interest payments and revenue narrowed from N2 trillion to N1.5 trillion within the period.

In a statement issued in Abuja, the ministry said the 124 per cent ratio did not present a complete picture of the government’s revenue position because some earnings were excluded from the calculation, while the interest figure covered obligations beyond the Federal Government alone.

According to the ministry, the interest payments include external loans obtained by state governments but serviced by the Federal Government.
It said comparing these obligations with federal revenue alone could overstate the ratio because the debt and revenue figures did not cover the same levels of government.

The ministry also said the revenue figure excluded independent income earned by government agencies and enterprises but not yet remitted to the Treasury.
It added that the timing of statutory tax payments affected the half-year figures, as some payments typically generate more revenue in the second half of the year.
The ministry cited the 2025 figures, saying the interest-to-revenue ratio stood at 156 per cent in the first half of that year but fell below 60 per cent for the full year. It also put the ratio at 97 per cent before the current administration’s reforms.
On the 2026 outlook, the ministry referred to the World Bank’s projection that Nigeria’s full-year debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue.

The ministry said the full-year figure was a more appropriate measure for assessing the country’s debt-service position than a six-month comparison.
It maintained that all Federal Government borrowing was within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.

The statement added that the government’s borrowing complied with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003.
It said the Debt Management Office regularly published information on government borrowing.

The ministry welcomed public scrutiny of government finances and urged analysts to compare revenue and debt figures covering the same levels of government and to consider the periods covered by the data.
It said the government remained open to requests for clarification on public finance figures.