Nigeria spends more on interest than it earns, says World Bank’s 2026 development update

Interest payments hit N7.7trn, representing 124% of federal revenue as borrowing cost stay high

Nigeria’s interest payments rose to N7.7 trillion in the first half of 2026 from N5.6 trillion a year earlier, amid high domestic borrowing costs, according to a World Bank report monitored by The Cable.

The bank said the interest bill consumed 124.19 percent of federal government revenue, which rose to N6.2 trillion from N3.6 trillion. In its 2026 Nigeria Development Update, titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities,” it said interest payments increased to 3.1 percent of GDP from 2.5 percent.

“Federal revenues rose to about 2.5 percent of GDP (N6.2 trillion), from 1.6 percent 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,” the World Bank said.

“Interest payments increased to 3.1 percent of GDP (N 7.7 trillion) from 2.5 percent (N5.6 trillion) amid high domestic borrowing costs. Reported capital spending fell to 0.3 percent of GDP (N0.7 trillion) from 1.0 percent while other expenditure remained at 1.3 percent.”

Total expenditure declined slightly to N16.1 trillion from N14.6 trillion in the same period of 2025. Personnel costs rose to N4.2 trillion from N3.7 trillion following wage adjustments.