Nigeria Spent N7.7tn on Debt Interest in H1 2026, 124% Above Revenue

The Federal Government spent N7.7tn on interest payments in the first half of 2026, equal to 124.2 per cent of its total revenue of N6.2tn for the period, according to the World Bank. Interest payments alone exceeded government revenue by N1.5tn between January and June 2026.

The figures are contained in the World Bank's October 2026 Nigeria Development Update, titled Beyond the Federal Purse: How Higher Revenues Shaped State Priorities. The report was obtained by The PUNCH.

Debt Service Rising Despite Better Collections

The World Bank data shows interest payments climbed by N2.1tn, or 37.5 per cent, from N5.6tn recorded in the same period of 2025. The bank blamed elevated domestic borrowing costs for the jump.

The report points to a widening gap between what Nigeria earns and what it pays to service debt, even as revenue collections improve. Interest payments are consuming more than every naira the government generates.

Pressure on the Federal Purse

The update's title, Beyond the Federal Purse: How Higher Revenues Shaped State Priorities, signals that the World Bank is also tracking how improved revenue has affected spending choices at the subnational level.

But the headline number for the federation is the N1.5tn shortfall between interest payments and revenue. That gap has to be covered from other sources, leaving less room for capital spending and other obligations.

What It Means for the Naira

Heavy domestic borrowing keeps pressure on interest rates, and by extension on the cost of credit for Nigerian businesses. It also crowds out private borrowers and feeds the cycle of rising debt service that the World Bank report highlights. Without a faster rise in revenue or a fall in borrowing costs, the Federal Government's interest bill will continue to outpace its income.