A pro-government advocacy group has praised the World Bank’s latest assessment of Nigeria’s economy, describing it as confirmation of fiscal stability across all levels of government following ongoing structural reforms.

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 media attention focused on revelations 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 highlighted broader gains in growth, poverty stabilization, and state-level revenue.

Sub-national revenue growth

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

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

The report showed 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 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 fall to 12 per cent by 2028 from 15.2 per cent in 2025.

Managing domestic debt burden

The group addressed concerns over high debt servicing expenses, pointing out that these obligations are predominantly linked to domestic loans rather than foreign concessional debt.

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

“Domestic debt is more expensive than external loans because the government must offer yields competitive with central bank rates 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 should help reduce domestic borrowing costs over the second half of the year.