World Bank: Nigeria’s H1 2026 Interest Payments at N7.7trn, Surpassing Federal Revenue

Nigeria spent N7.7 trillion on interest payments in the first six months of 2026, a figure higher than the N6.2 trillion generated as federal government revenue during the same period, according to the World Bank. In the same half of 2025, interest payments were N5.6 trillion. The latest amount represented 124.19 percent of federal revenue. The World Bank made the disclosure in its 2026 Nigeria Development Update, titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities.” It blamed the rise on elevated costs of domestic borrowing. Interest payments moved from 2.5 percent of GDP to 3.1 percent, even as government revenue improved. The report stated that federal revenues increased to approximately 2.5 percent of GDP (N6.2 trillion), up from 1.6 percent of GDP (N3.6 trillion) a year before. It credited the increase to a rebound in oil receipts, stronger corporate tax collections, and higher independent revenues, while customs revenues were stable and VAT collections remained relatively unchanged. The bank also observed a change in the makeup of government spending, as larger interest obligations came alongside a drop in reported capital expenditure. Interest payments climbed to 3.1 percent of GDP (N7.7 trillion) from 2.5 percent (N5.6 trillion) due to high domestic borrowing costs. Reported capital spending decreased to 0.3 percent of GDP (N0.7 trillion) from 1.0 percent, while other expenditure stayed at 1.3 percent. Total spending rose in nominal terms to N16.1 trillion, compared with N14.6 trillion in the first half of 2025. As a proportion of GDP, however, it edged down from 6.6 percent to 6.5 percent. Personnel costs also increased to N4.2 trillion from N3.7 trillion after wage adjustments, though they remained at 1.7 percent of GDP.