IMF
By Iyunade Grace
The International Monetary Fund (IMF) projects Nigeria’s debt-to-GDP ratio to decline to 35% by 2026, driven by expected fiscal consolidation measures, improved revenue mobilization, and positive economic growth. According to the IMF’s Fiscal Monitor Report, the country’s debt-to-GDP ratio will fall from 39.3% in 2024 to 36.4% in 2025 and further to 35% in 2026.
This decline indicates a shrinking debt burden relative to the size of the economy, underscoring progress in public financial management and reduced dependence on borrowing. The IMF attributes the improvement to Nigeria’s efforts to strengthen its revenue and expenditure sides, including tax reforms and improved public financial management.
The IMF also notes that Nigeria’s public debt trajectory is expected to stabilize over the medium term, hovering between 41.1 and 41.4% of GDP from 2027 through 2030. These figures include overdrafts from the Central Bank of Nigeria and liabilities of the Asset Management Corporation of Nigeria (AMCON).
The projected decline in Nigeria’s debt-to-GDP ratio signals a gradual improvement in debt sustainability, driven by fiscal discipline, reform in tax administration, and renewed efforts to diversify revenue sources. A falling debt-to-GDP ratio indicates that the size of Nigeria’s debt is shrinking relative to its growing economy—an encouraging trend for investors and development partners.
The IMF has also commended Nigeria’s recent fiscal reforms, including tax digitization, subsidy removal, and tighter monetary-fiscal coordination, as steps in the right direction. The government’s commitment to improving the efficiency of spending and increasing social investment could further strengthen growth prospects and reduce inequality.
