Nigeria’s interest payments on government debt rose to N7.7 trillion in the first half of 2026, exceeding the Federal Government’s total revenue of N6.2 trillion by about N1.5 trillion, according to the World Bank.
Gatekeepers News reports that the figures, published in the bank’s October 2026 Nigeria Development Update titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities, show that debt interest payments consumed 124.19 per cent of federal revenue between January and June 2026.
World Bank said interest payments increased from N5.6 trillion in the corresponding period of 2025 to N7.7 trillion in the first half of 2026, representing a rise of N2.1 trillion, or 37.5 per cent.
The increase came amid high domestic borrowing costs, despite an improvement in government revenue during the period.
According to the report, federal revenue rose to N6.2 trillion, equivalent to 2.5 per cent of gross domestic product (GDP), from N3.6 trillion, or 1.6 per cent of GDP, in the first half of 2025.
The bank attributed the improvement to a recovery in oil receipts, stronger corporate tax collections and higher independent revenues, while customs revenue remained stable and value-added tax collections were comparatively flat.
The report further showed that the Federal Government’s total expenditure reached N16.1 trillion in the first half of 2026, compared with N14.6 trillion in the same period of 2025.
However, capital expenditure declined sharply to N700 billion, representing 0.3 per cent of GDP, from 1.0 per cent of GDP a year earlier. The decline indicates that less was recorded as capital spending even as debt interest payments took up a larger share of available resources.
Personnel costs, meanwhile, rose to N4.2 trillion from N3.7 trillion following wage adjustments, while other expenditure remained at 1.3 per cent of GDP.
The figures highlight the pressure debt servicing continues to place on the government’s finances. Although revenue improved, interest payments alone exceeded the amount collected, leaving less fiscal space for infrastructure and other public services.
The World Bank’s findings also underscore the importance of increasing government revenue and reducing borrowing costs to create more room for development spending.
