The Federal Government has defended its borrowing practices, insisting that all loans obtained by the administration comply with legal requirements and limits approved by the National Assembly.
The Federal Ministry of Finance stated this in a press release issued on Sunday while responding to concerns over the Federal Government’s interest payments, which reportedly reached 124 per cent of revenue in the first half of 2026.
The ministry said all borrowing fell within the limits approved by the National Assembly under the 2026 Appropriation Act and the approved borrowing plan.
“All borrowing is conducted in full compliance with the Fiscal Responsibility Act 2007 and the Debt Management Office (Establishment) Act 2003,” the statement said.
It added that information on government borrowing was published regularly by the Debt Management Office.
The ministry was also responding to recent analysis based on the World Bank’s October 2026 Nigeria Development Update, which indicated that interest payments stood at 124 per cent of federal revenue between January and June 2026.
Describing the conclusion as misleading, the ministry argued that the calculation included debts serviced on behalf of other tiers of government while comparing the payments with federal revenue alone.
It also said the reported revenue excluded some earnings by government agencies that had not yet been remitted to the Treasury.
The ministry noted that federal revenue rose by 72 per cent, from ₦3.6 trillion in the first half of 2025 to ₦6.2 trillion in the corresponding period of 2026.
Interest payments, however, increased by 38 per cent, from ₦5.6 trillion to ₦7.7 trillion over the same period.
“Revenue is therefore growing almost twice as fast as interest costs,” the ministry said.
It added that the interest-to-revenue ratio fell from 156 per cent in the first half of 2025 to 124 per cent in the first half of 2026.
The ministry also said the gap between interest payments and revenue narrowed from ₦2 trillion to ₦1.5 trillion during the period.
“This is the result of reforms working, not a sign of fiscal distress,” it stated.
On debt sustainability, the ministry maintained that a six-month assessment was insufficient to determine the country’s overall debt position.
“Debt sustainability is assessed on a full-year basis, not over six months,” the statement said.
It cited the World Bank’s projection that Nigeria’s full year 2026 debt service, covering both interest and principal repayments, would amount to 46 per cent of revenue.
The ministry described the projection as a more appropriate benchmark for assessing the country’s debt servicing position.
It also urged analysts and commentators to exercise care when interpreting public finance data.
“The Ministry welcomes informed scrutiny of public finances,” the statement said.
“We encourage analysts and commentators to apply the same rigour they seek to hold the government to: compare like with like, read figures in context, and seek clarification where the data is unclear.”