Nigeria’s Minister of Finance, Taiwo Oyedele, confirmed during an interview and briefing at Chatham House in London that the federal fiscal deficit for 2026 will come in narrower than the initial target of 4.2% of Gross Domestic Product (GDP).
The improved fiscal trajectory is driven by higher revenue collection and reduced domestic borrowing costs following the Central Bank of Nigeria’s (CBN) 350 basis point reduction in the Monetary Policy Rate (MPR) to 23.00%.
“We think it will be narrower than the 4.2%,” Oyedele said on Wednesday. “The priority is the cost of debt relative to revenue and that already is moving in the right direction.”
Benchmark average sovereign bond yields dropped for the sixth consecutive trading session to 16.5%, directly lowering debt-servicing costs across sovereign issuances.
While total public debt rose 21% year-on-year to $121 billion as of June 2026, the Finance Ministry rejected World Bank claims that H1 interest payments exceeded revenue by 24%, clarifying that official figures omitted key government receipts and included state-level debt servicing.
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