The World Bank disclosed this in its 2026 Nigeria Development Update (NDU), titled 'Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities'. Follow us on WhatsApp | LinkedIn for the latest headlines 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.