Federal Government Challenges World Bank's Debt Servicing Claims

The Federal Government of Nigeria has publicly disagreed with the World Bank's recent report which indicated a staggering 124% debt servicing to revenue ratio for the first half of 2026. According to the World Bank's Nigeria Development Update (NDU), this figure suggests that the federal government's expenditures on debt servicing far outstrip its revenue, raising concerns over the nation's fiscal health.

In response, the Federal Ministry of Finance issued a statement clarifying that the World Bank's analysis is misleading due to several key factors. The ministry emphasized that the debt servicing figures cited by the World Bank encompass obligations incurred not only by the federal government but also by state governments. This means that measuring federal debt servicing against federal revenue alone provides an inaccurate portrayal of the financial situation.

“The interest figure includes debt the Federal Government services on behalf of other tiers of government, including external loans to states,” the statement elaborated. “Measuring this against federal revenue alone overstates the ratio which is only meaningful when debt and revenue cover the same level of government.” Furthermore, the ministry pointed out that the reported revenue figures are incomplete, omitting independent revenues generated by government agencies that have not yet been remitted to the Treasury.

Additionally, the government noted that revenue collection typically sees an uptick in the latter half of the year, as certain tax payments are scheduled to be made during that period. This pattern has been observed in previous years; for instance, the debt-service-to-revenue ratio was recorded at 156% in the first half of 2025, but decreased to below 60% for the entire year. The Federal Government remains optimistic about improving its financial metrics as the year progresses.