The Federal Government spent N7.7tn on debt interest payments in the first half of 2026, exceeding its total revenue of N6.2tn by N1.5tn, according to the World Bank.
The figures were contained in the bank’s October 2026 Nigeria Development Update, which showed that interest payments rose by 37.5 per cent from N5.6tn recorded in the corresponding period of 2025, largely due to high domestic borrowing costs.
Despite the increase in debt servicing, federal revenue grew by 72.2 per cent, rising from N3.6tn in the first half of 2025 to N6.2tn in the same period of 2026. The growth was supported by improved oil receipts, stronger corporate tax collections and higher independent revenues.
Total federal expenditure also increased by 10.3 per cent, from N14.6tn to N16.1tn. Personnel costs rose from N3.7tn to N4.2tn, while reported capital expenditure fell sharply to N700bn, representing 0.3 per cent of Gross Domestic Product.
The World Bank noted that interest and personnel costs accounted for N11.9tn, or about 73.9 per cent of total federal spending, leaving limited funds for infrastructure and other development projects.
Although the federal fiscal deficit narrowed from N11tn in the first half of 2025 to N9.9tn in the same period of 2026, the bank cautioned that the improvement was partly linked to low capital spending.
The report estimated Nigeria’s public debt at about N177tn in 2025, equivalent to 40 per cent of GDP, up from N67tn in 2021. It attributed the increase partly to exchange-rate valuation effects and the recognition of previously accumulated liabilities.
The World Bank recommended stronger revenue mobilisation, improved budget planning, reduced reliance on expensive borrowing and greater use of concessional financing to ease debt pressures and create more room for development spending.
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