Nigeria’s debt interest soars 124% above revenue

Federal Government interest payments surged 124.2% in the first half of 2026, surpassing total revenue by N1.5tn, according to the World Bank's Nigeria Development Update. Interest expenses increased by N2.1tn, or 37.5%, from N5.6tn in the same period last year, primarily due to higher domestic borrowing costs. Despite improved revenue collections, which rose by 72.2% to N6.2tn from N3.6tn, the rising interest burden left limited resources for infrastructure, public services and other commitments.

The World Bank attributed the increase to a recovery in oil receipts, stronger corporate tax collections, and higher independent revenues, while customs revenues remained stable. However, personnel expenditure also grew from N3.7tn to N4.2tn due to wage adjustments, while capital expenditure declined sharply, falling to 0.3% of GDP, or N700bn.

The deficit narrowed from N11tn, or 5% of GDP, in the first half of 2025 to N9.9tn, or 4% of GDP, in the corresponding period of 2026, but the report cautioned that the improvement was partly due to reduced capital expenditure. The World Bank projected that Nigeria's consolidated fiscal deficit would widen from 3.1% of GDP in 2025 to 3.5% in 2026, driven by rising interest, personnel, and pre-election spending.