Nigeria’s debt interest payments rose to N7trn in first half of 2026 and now gulping over 100% of revenue - World Bank

Nigeria’s interest payments rose to N7.7 trillion in the first half of 2026, exceeding federal government revenue of N6.2 trillion during the period, according to the World Bank. The payments, which stood at N5.6 trillion in the corresponding period of 2025, were equivalent to 124.19 per cent of federal revenue.

In its 2026 Nigeria Development Update, titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities,” the bank attributed the increase to high domestic borrowing costs. Interest payments rose from 2.5 per cent of gross domestic product to 3.1 per cent, despite an improvement in government revenue.

“Federal revenues rose to about 2.5 percent of GDP (N6.2 trillion), from 1.6 percent of GDP (N3.6 trillion) 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,” the report said. The bank noted that the composition of government spending shifted, with higher interest payments accompanied by a decline in reported capital expenditure.

“Interest payments increased to 3.1 percent of GDP (N 7.7 trillion) from 2.5 percent (N5.6 trillion) amid high domestic borrowing costs. Reported capital spending fell to 0.3 percent of GDP (N0.7 trillion) from 1.0 percent while other expenditure remained at 1.3 percent.”

Total expenditure increased in nominal terms to N16.1 trillion from N14.6 trillion in the first half of 2025. However, it declined slightly as a share of GDP, from 6.6 per cent to 6.5 per cent. Personnel costs also rose to N4.2 trillion from N3.7 trillion following wage adjustments, while remaining unchanged at 1.7 per cent of GDP.