Nigeria's Finance Ministry Defends 124% Debt Interest Ratio

On October 19, the Federal Government of Nigeria, through the Federal Ministry of Finance, defended its reported 124% debt interest ratio, which critics claim indicates a severe fiscal issue. The ministry argued that this figure, derived from the World Bank's October Nigeria Development Update, is misleading due to mismatched calculations and the exclusion of certain revenues.

It noted that interest payments consumed N7.7 trillion against revenues of N6.2 trillion in the first half of 2026, a significant increase from N5.6 trillion in interest payments and N3.6 trillion in revenue during the same period in 2025. This resulted in a decrease in the interest-to-revenue ratio from approximately 156% to 124%.

The ministry asserted that the government's reforms are effective, as revenue growth outpaced interest payment increases. However, analysts question whether Nigeria's revenue generation is sufficient to meet its obligations and support essential services without excessive borrowing.