The Federal Government spent N7.7tn on interest payments in the first half of 2026, representing 124.2 per cent of its total revenue of N6.2tn during the period, according to the World Bank.
The figures indicate that interest payments alone exceeded total government earnings by N1.5tn between January and June 2026, raising fresh concerns about Nigeria’s escalating debt burden despite improved tax collections.
The findings were detailed in the World Bank’s October 2026 Nigeria Development Update, titled *Beyond the Federal Purse: How Higher Revenues Shaped State Priorities*.
According to the report, interest obligations surged by N2.1tn, or 37.5 per cent, from N5.6tn recorded in the corresponding period of 2025, largely driven by elevated domestic borrowing costs.
The World Bank stated, “Interest payments increased to 3.1 per cent of GDP (N7.7tn) from 2.5 per cent (N5.6tn) amid high domestic borrowing costs.”
Although the interest-to-revenue ratio improved from 155.6 per cent in H1 2025 to 124.2 per cent in H1 2026, debt servicing continues to swallow the entirety of federal inflows, leaving non-debt spending heavily dependent on further borrowing.
On the revenue front, total federal collections rose by N2.6tn, or 72.2 per cent, jumping from N3.6tn in the first half of 2025 to N6.2tn during the same period in 2026.
The World Bank stated, “Federal revenues rose to about 2.5 per cent of GDP (N6.2tn), from 1.6 per cent of GDP (N3.6tn) a year earlier, supported by a recovery in oil receipts, stronger corporate tax collections, and higher independent revenues, while customs revenues held stable and VAT collections stayed comparatively flat.”
Despite these gains, overall federal expenditure climbed from N14.6tn to N16.1tn, while wage adjustments pushed personnel spending up from N3.7tn to N4.2tn over the six-month period.
Meanwhile, reported capital expenditure suffered a steep decline, falling to just N700bn—meaning the Federal Government spent 11 times more on servicing debt than on critical infrastructure projects.
