Nigeria’s debt interest payments surge 37.5% to N7.7trn in H1’26 — World Bank

Nigeria’s debt interest payments surged by 37.5 per cent to N7.7 trillion in the first half of 2026 from N5.6 trillion in the corresponding period of 2025.

This indicates that the interest payments exceed the Federal Government’s revenue of N6.2 trillion during the period by N1.5 trillion, representing 24.2 per cent.

The World Bank disclosed this in its 2026 Nigeria Development Update (NDU), titled ‘Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities’.

According to the report, interest payments rose to 3.1 per cent of Gross Domestic Product (GDP) in the first half of 2026, from 2.5 per cent in the corresponding period of 2025, highlighting the growing pressure of debt servicing on public finances.

The increase came despite a significant improvement in Federal Government revenue, which rose by more than 72 per cent to N6.2 trillion, representing 2.5 per cent of GDP, from N3.6 trillion, or 1.6 per cent of GDP, in the first half of 2025.

The bank attributed the revenue growth to a recovery in oil receipts, stronger corporate tax collections and higher independent revenues, while customs revenues remained stable and Value Added Tax (VAT) collections were comparatively flat.

It stated: “Federal revenues rose to about 2.5 per cent of GDP (N6.2 trillion), from 1.6 per cent 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.”

On expenditure, the World Bank said interest payments increased to 3.1 per cent of GDP, or N7.7 trillion, from 2.5 per cent, or N5.6 trillion, amid high domestic borrowing costs.

The rising debt burden coincided with a sharp decline in reported capital expenditure, which fell to 0.3 per cent of GDP, or N700 billion, from 1.0 per cent in the corresponding period of 2025. Other expenditure remained unchanged at 1.3 per cent of GDP.

Meanwhile, total government expenditure rose to N16.1 trillion in the first half of 2026 from N14.6 trillion a year earlier, although it declined marginally as a share of GDP to 6.5 per cent from 6.6 per cent.

Personnel costs also increased to N4.2 trillion from N3.7 trillion following wage adjustments, but remained unchanged at 1.7 per cent of GDP.

The figures underscore the pressure of rising debt-servicing costs on the Federal Government’s fiscal position, with interest payments exceeding revenue and reported capital spending accounting for a smaller share of economic output.