The International Monetary Fund (IMF) has projected that Nigeria’s debt-to-GDP ratio will ease to 35 percent by 2026, down from an estimated 39.3 percent in 2024 and 36.4 percent in 2025, signaling growing fiscal stability and improved debt management.
According to the IMF’s latest Fiscal Monitor report, the projection includes Nigeria’s total public debt—covering Central Bank overdrafts and liabilities of the Asset Management Corporation of Nigeria (AMCON). The report reflects a gradual strengthening of Nigeria’s fiscal position, supported by enhanced revenue mobilisation, prudent spending, and steady economic growth.
The IMF noted that the anticipated decline in Nigeria’s debt ratio underscores progress in public financial management and reduced reliance on borrowing, as fiscal consolidation and economic reforms continue to take hold.
Speaking during a press briefing on the report, the IMF’s Director of Fiscal Affairs, Vitor Gaspar, described Nigeria’s fiscal stance as “broadly consistent with efforts to curb inflation while maintaining sustainable growth.” He was joined by Era Dabla-Norris, Deputy Director; Davide Furceri, Division Chief; and Tatiana Mossot, Senior Communications Officer, all of the IMF Fiscal Affairs Department.
Gaspar commended Nigeria’s ongoing tax and fiscal reforms, noting that the country has made significant strides in broadening its revenue base without imposing excessive burdens on low-income households or businesses. “The policies being implemented in Nigeria are consistent with a structural fiscal framework that strengthens both the revenue and expenditure sides of government operations,” he said.
He stressed that while progress has been recorded, there remains ample room to enhance tax administration, streamline expenditure, and expand social safety nets to protect vulnerable citizens. “Improving spending efficiency and revenue collection is key to sustaining growth and addressing social vulnerabilities,” Gaspar added.
The IMF’s broader outlook, however, offered a cautious view of global fiscal dynamics. Gaspar revealed that global public debt has worsened since the April 2025 meeting, with total debt expected to surpass 100 percent of global GDP—the highest level since 1948. Under adverse economic scenarios, the ratio could climb to 124 percent by 2029.
He noted that while advanced economies such as the United States, Japan, France, and the United Kingdom have debt levels exceeding 100 percent of GDP, they remain cushioned by deep financial markets and stronger institutional credibility. In contrast, many emerging and low-income economies, including those in Africa, face mounting fiscal pressures due to limited access to financing and weaker policy buffers.
Rising global interest rates, Gaspar warned, have significantly increased borrowing costs, constraining government budgets and threatening fiscal sustainability. Global interest payments are projected to rise from 2 percent of GDP in 2020 to 2.9 percent in 2025, driven by higher financing needs and persistent spending pressures from defence, climate adaptation, and disaster response.
He emphasised that rebuilding fiscal buffers is critical to safeguarding economies from shocks and ensuring long-term financial stability. “Starting from already high deficits and debts, the persistence of spending above revenue will push debt to ever higher levels,” he cautioned. “Countries must act now to strengthen fiscal discipline, build resilience, and foster growth through effective public spending and institutional reforms.”
Gaspar urged countries, including Nigeria, to prioritise growth-oriented investments such as education, infrastructure, and innovation while maintaining budgetary prudence. He also underscored the importance of transparency, governance, and accountability in building public trust and investor confidence.
Reaffirming the IMF’s commitment to member countries, Gaspar said the Fund would continue to support Nigeria in implementing fiscal and structural reforms that promote inclusive growth, macroeconomic stability, and public trust in government institutions.
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