Nigeria’s public debt is projected to rise modestly to 34.68 per cent of Gross Domestic Product (GDP) by the end of 2026, with the overall debt trajectory expected to remain sustainable amid improving exchange rate stability, the Central Bank of Nigeria (CBN) has said.
The projection is contained in the CBN’s 2026 Macroeconomic Outlook for Nigeria, which shows a slight increase from the 33.98 per cent recorded at end-June 2025. The apex bank attributed the uptick to anticipated new borrowings under continued discretionary fiscal policy actions.
Despite the increase, the CBN maintained that Nigeria’s debt outlook remains stable, noting that key drivers of debt accumulation in recent years—particularly exchange rate-related valuation effects—are expected to weaken significantly in 2026.
According to the report, Nigeria’s public debt-to-GDP ratio is projected at 34.68 per cent by end-2026, compared with 33.98 per cent at end-June 2025.
“The public debt is anticipated to remain on a sustainable path in 2026. It is projected at 34.68 per cent of GDP by end-2026 compared with 33.98 per cent at end-June 2025,” the apex bank stated.
The CBN explained that exchange rate revaluation effects, which dominated debt growth between 2023 and 2025 following sharp currency depreciation, are expected to narrow considerably in 2026 due to improved exchange rate stability.
During the period under review, exchange rate movements were identified as the primary contributor to debt growth, as naira depreciation significantly increased the domestic value of foreign-currency-denominated debt. However, the bank noted that this trend is likely to taper in 2026, reducing the impact of valuation losses on the overall debt stock.
“With these valuation losses easing, debt growth will rely less on one-off adjustments and more on traditional factors such as the primary balance, supported by the Tax Act of 2025 and real economic growth,” the CBN said.
The outlook, the bank added, is underpinned by expected tax reforms and stronger economic growth, which should enhance revenue mobilisation and reduce reliance on exchange rate-driven debt expansion.
The shift away from exchange rate-induced debt growth suggests that Nigeria’s public debt dynamics in 2026 will be shaped more by core fiscal fundamentals than by external shocks. Sustained exchange rate stability, improved revenues and stronger growth could enhance debt service capacity, lower borrowing costs and reinforce confidence in Nigeria’s medium-term debt sustainability.
Meanwhile, the World Bank has also projected a positive outlook for Nigeria’s debt profile. In its October 2025 Nigeria Development Update (NDU), titled ‘From Policy to People: Bringing the Reform Gains Home’, the World Bank forecast that Nigeria’s public debt would fall below 40 per cent of GDP for the first time in over a decade.
The Bretton Woods institution further projected that economic growth would rise modestly from 4.2 per cent in 2025 to 4.4 per cent by 2027, reflecting the gradual impact of ongoing reforms.
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