Nigeria Spends N7.7trn On Debt Interest In Six Months, Exceeding Revenue — World Bank

Nigeria’s curiosity funds on public debt rose to N7.7 trillion within the first half of 2026, exceeding the Federal Government’s income of N6.2 trillion for the interval, in line with the World Bank.

The determine represents 124.19 per cent of the federal government’s reported income, highlighting the stress debt-servicing obligations proceed to exert on federal funds.

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, curiosity funds elevated from N5.6 trillion within the corresponding interval of 2025 to N7.7 trillion within the first half of 2026, amid excessive home borrowing prices.

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The financial institution stated curiosity funds rose from 2.5 per cent of Gross Domestic Product (GDP) within the first half of 2025 to three.1 per cent within the corresponding interval of 2026.

The improve occurred regardless of an enchancment in federal income, which climbed to N6.2 trillion, representing 2.5 per cent of GDP, from N3.6 trillion, or 1.6 per cent of GDP, within the first half of 2025.

The World Bank attributed the income progress to a restoration in oil receipts, stronger company tax collections and better unbiased revenues.

However, customs income remained broadly steady, whereas Value Added Tax collections recorded comparatively little change, in line with the report.

The financial institution’s figures additionally confirmed that reported capital expenditure fell considerably to N700 billion, equal to 0.3 per cent of GDP, within the first half of 2026, from N1 trillion, or 1.0 per cent of GDP, within the corresponding interval of 2025.

The decline in capital spending occurred as curiosity funds absorbed greater than the federal authorities generated in income through the interval.

The report additional confirmed that whole federal expenditure stood at N16.1 trillion, representing 6.5 per cent of GDP, in contrast with N14.6 trillion, or 6.6 per cent of GDP, within the first half of 2025.

Although nominal expenditure elevated, whole spending declined barely as a share of the nation’s financial output.

Personnel prices additionally rose from N3.7 trillion to N4.2 trillion following wage changes, whereas remaining unchanged at 1.7 per cent of GDP.

The figures level to competing calls for on the Federal Government’s funds, together with debt servicing, personnel prices and funding for capital tasks.

With curiosity funds exceeding income, the federal government’s capability to finance infrastructure and different public companies from its internally generated sources stays beneath stress, making borrowing and different financing preparations essential to assembly expenditure obligations.

The World Bank’s findings additionally underscore the significance of stronger income mobilisation, improved debt administration and efficient expenditure prioritisation in efforts to strengthen Nigeria’s public funds.

Source: World Bank’s 2026 Nigeria Development Update.