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A pro-government advocacy group has highlighted findings from the World Bank’s latest report on Nigeria, pointing to signs of macroeconomic stabilization and sub-national revenue growth despite rising domestic debt servicing costs.

The Tinubu Media Support Group (TMSG) stated on Friday responding to the multilateral lender’s latest Nigeria Development Update, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities.

While the report noted that Nigeria’s interest payments rose to 7.7 trillion naira ($4.8bn) in the first half of 2026 from N5.6tn in the same period last year, TMSG emphasized that the report also outlined key improvements in overall growth, poverty levels, and regional finances.

Sub-national revenue surge

In a joint statement, TMSG Chairman Emeka Nwankpa and Secretary Dapo Okubanjo noted that economic reforms had significantly boosted state-level finances.

According to the World Bank, revenues across Nigeria’s 36 states grew in real terms by 93 per cent between 2023 and 2025 following higher monthly distributions from the Federation Account Allocation Committee (FAAC).

The report noted that 21 states successfully reduced their debt-to-GDP ratios over the period, while 31 states recorded gains in internally generated revenue (IGR).

The World Bank also projected Nigeria’s economy to grow by 4.4 per cent between 2026 and 2028, up from 4.2 per cent in the first half of 2026, while forecasting inflation to drop to 12 per cent by 2028.

Addressing domestic debt burdens

The support group acknowledged concerns raised by the World Bank regarding high debt servicing expenses, but pointed out that these costs are primarily tied to domestic borrowing rather than external loans.

Domestic debt—which includes N64.88tn in federal government bonds, securitized “Ways and Means” advances from the central bank, and N4.59tn in state-level obligations—accounts for 57 per cent of total public debt but generates about 72 per cent of interest costs.

“Domestic debt is more expensive than external concessional loans because the government must offer competitive yields to attract bond investors,” the group said.

However, TMSG added that the Central Bank of Nigeria’s recent decision to lower its benchmark interest rate from 26.5 per cent to 23 per cent is expected to ease the government’s domestic debt service burden over the coming months.