By Gabriel Ameh
The Tinubu Media Support Group (TMSG) has cited a World Bank report highlighting a 93 per cent increase in state government revenues in real terms between 2023 and 2025, describing the development as evidence of improved public finances under President Bola Tinubu’s administration.
The group, however, acknowledged concerns over Nigeria’s rising debt servicing costs, arguing that the report also highlights improvements in economic growth, government revenues and the financial position of state governments.
In a statement signed by its Chairman, Emeka Nwankpa, and Secretary, Dapo Okubanjo, TMSG said the World Bank’s report, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities, should be assessed beyond its findings on rising interest payments.
The group was reacting to the World Bank’s latest Nigeria Development Update, which reported that interest payments rose to ₦7.7 trillion in the first half of 2026, compared with ₦5.6 trillion recorded during the corresponding period of 2025.
According to TMSG, the report also points to signs of economic stabilisation, including a moderation in poverty levels after years of rising economic hardship.
The group quoted the World Bank as reporting that Nigeria’s economy grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent during the same period in 2025.
It added that the World Bank projected economic growth of 4.4 per cent between 2026 and 2028, while inflation was projected to decline to approximately 12 per cent by 2028 from 15.2 per cent in 2025.
TMSG said these projections reflected improvements in the economic outlook, despite the potential impact of the ongoing conflict in the Middle East on the global economy.
State Governments Benefit from Higher Revenues
The group also highlighted the World Bank’s reported finding that federation revenues increased by 69 per cent in real terms between 2023 and 2025, with state governments emerging as major beneficiaries.
According to TMSG, the additional revenue has helped strengthen state finances, with at least 21 states recording considerable reductions in their debt-to-gross domestic product ratios between 2021 and 2025.
It further cited the report as indicating that increased Federation Account Allocation Committee (FAAC) disbursements had provided opportunities for 31 states to improve their internally generated revenue.
The group argued that these developments demonstrated the importance of increased allocations and improved revenue mobilisation in strengthening the capacity of state governments to meet their financial obligations.
TMSG Acknowledges Rising Debt Servicing Costs
Despite highlighting the reported gains, TMSG acknowledged the World Bank’s concerns over the increasing cost of servicing domestic debt.
The group said domestic borrowings accounted for more than 57 per cent of Nigeria’s public debt profile but generated approximately 72 per cent of the country’s interest payments on debt servicing.
It cited the domestic debt stock as including ₦64.88 trillion in Federal Government bonds, ₦22.11 trillion in securitised Ways and Means advances inherited from previous administrations, and ₦4.59 trillion in subnational debt collectively owed by the 36 states and the Federal Capital Territory.
TMSG attributed the relatively high cost of domestic borrowing to the interest rates the government must offer investors to attract funds through bonds and Treasury bills.
According to the group, domestic debt instruments are generally more expensive to service than concessional external loans, which typically offer more favourable borrowing terms.
The group also argued that a reduction in the Central Bank of Nigeria’s benchmark interest rate from 26.5 per cent to 23 per cent, as cited in its statement, could help reduce the cost of domestic borrowing and ease the government’s debt servicing burden.
It expressed optimism that lower borrowing costs could provide some relief in the second half of 2026.
Economic Gains and Fiscal Pressures
While TMSG maintained that the World Bank’s findings pointed to improvements in government revenues and economic growth, the reported increase in debt servicing costs remains a significant fiscal concern.
The competing developments highlight the challenge facing Nigeria as the government seeks to consolidate economic reforms, sustain growth, control inflation and manage its debt obligations.
The World Bank’s findings, as presented by TMSG, suggest that higher government revenues have created additional fiscal space for states. However, the long-term impact will depend partly on how effectively governments manage their spending, generate revenue and control borrowing costs.
TMSG urged Nigerians to consider the report’s findings on revenue growth and economic performance alongside its concerns about rising interest payments.
Source: Tinubu Media Support Group (TMSG).
