Nigeria’s debt-to-gross domestic product (GDP) ratio is projected to rise to 33.1 per cent by 2027, according to the International Monetary Fund’s latest Fiscal Monitor Report. The forecast, released during the IMF-World Bank spring meetings in Washington DC, marks a slight increase from the expected 32.3 per cent in 2026 and follows President Bola Tinubu’s request for parliament to approve $6 billion in external borrowing.
The IMF report places Nigeria’s 2025 debt-to-GDP ratio at 35.3 per cent, reflecting continued pressure on public finances as the government seeks to fund development and manage economic challenges. Globally, gross government debt is expected to approach 94 per cent of GDP in 2025, with projections indicating it could reach 100 per cent by 2029—a level last seen in the aftermath of World War II.
The Fund warns that global debt-at-risk could climb to nearly 117 per cent of GDP within three years, with a significant gap between median projections and potential downside risks. Rodrigo Valdés, director of the IMF’s Fiscal Affairs Department, stressed the importance of maintaining fiscal space for future crises, cautioning that delays in consolidation could force steeper adjustments later.
Nigeria’s total public debt—covering federal and state governments—rose to N159.27 trillion at the end of 2024’s fourth quarter, up from N144.67 trillion a year earlier, according to the Debt Management Office. This upward trend aligns with the IMF’s concerns over deteriorating fiscal outlooks in many economies.
The IMF also flagged geopolitical risks, including prolonged conflict in the Middle East, which could push global debt-at-risk up by an additional 4 percentage points through higher fuel and food prices, tighter financial conditions, and increased defence spending. A sharp correction in artificial intelligence-related asset valuations could add another 2.4 percentage points to debt-at-risk.
For low-income developing economies like Nigeria, the IMF advises prioritising domestic revenue mobilisation to protect social and development spending, noting that external aid alone cannot bridge the gap. Fiscal policy should avoid discretionary stimulus unless conditions shift dramatically, as such measures could complicate inflation control and strain public finances further. Broad-based energy subsidies and excise reductions are discouraged, as they distort price signals, are fiscally costly, and difficult to reverse.
The report underscores the need for credible medium-term fiscal frameworks and clear communication to anchor market confidence and avoid disorderly consolidation in the future.
