Nigeria’s debt interest soars 124% above revenue

In the first half of 2026, Nigeria's federal government spent N7.7tn on interest payments, accounting for 124.2% of its total revenue of N6.2tn, according to the World Bank. The report titled "Beyond the Federal Purse: How Higher Revenues Shaped State Priorities" revealed that interest payments had soared by N2.1tn, or 37.5%, from N5.6tn in the same period of 2025, largely due to high domestic borrowing costs.

The increase in debt service costs pushed interest expenses to 3.1% of GDP, up from 2.5% the previous year, despite a 31.4 percentage point improvement in the interest-to-revenue ratio from 155.6% to 124.2%. While revenue rose by 72.2% to N6.2tn from N3.6tn, total federal spending climbed by 10.3% to N16.1tn, leaving limited resources for critical expenditures like infrastructure and public services.

The World Bank warned that Nigeria's debt stock had risen to N177tn in 2025, equal to 40% of GDP, up from N67tn in 2021, largely due to domestic borrowing costs. The report urged the government to strengthen revenue mobilisation, improve fiscal discipline, and pursue more concessional financing to alleviate the mounting debt burden.