Nigeria’s debt-to-gross domestic product (GDP) ratio hit 32.3 per cent in 2026, according to new data from the International Monetary Fund (IMF).
The IMF revealed the projection in its Fiscal Monitor report, published on Wednesday at the ongoing IMF-World Bank Spring Meetings in Washington DC.
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According to the IMF, Nigeria’s debt-to-GDP ratio slumped from 35.5 per cent in 2025 to 32.3 per cent in 2026 and is expected to be 33.1 per cent in 2027.
By 2031, Nigeria’s debt will return to 30.1 per cent of its GDP, per the IMF projection.
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In the report, the IMF explained that constraints on the fiscal scope of low-income emerging economies could force governments to cut spending on essential services such as health, education, and social protection, which could worsen poverty.
“For many low-income developing countries, shrinking aid flows have shifted from a latent concern to a binding constraint on fiscal space.
“Fiscal adjustment risks are forcing cuts to essential services (health, education, and social protection) that are critical for development and poverty reduction.
“Recent evidence underscores these costs: A consolidation of 1 percent of GDP is estimated to reduce output by about 0.5 percent cumulatively after two years in sub-Saharan Africa,” the IMF report stated.
Meanwhile, the Debt Management Office (DMO) announced, on Wednesday, that Nigeria’s total public debt for federal and state governments rose to N159.27 trillion at the end of quarter four of 2025.
The federal and state debt update shows a N5.98 trillion increment from N153.29 trillion in quarter three of the same year, and N14.6 trillion higher than the N144.67 trillion recorded in quarter four of 2024.
On 31 March, PREMIUM TIMES reported that the House of Representatives approved a $6 billion external borrowing request submitted by President Bola Tinubu.
The approval cleared the way for the federal government to access fresh financing from lenders in the United Arab Emirates and the United Kingdom.
Global debt-to-gdp
The IMF also revealed that global fiscal deficit remained broadly unchanged at 5 per cent of GDP in 2025, and gross public debt climbed to 93.9 per cent of world GDP.
Citing the ongoing conflict in the Middle East, the IMF said that the global debt will reach 100 percent by 2029, which was only reached in the aftermath of World War II.
The IMF noted that the conflict in the Middle East could further strain government finances through higher food and fuel prices, tighter financial conditions, lower activity, and rising defence outlays.
According to the report, if the conflict is prolonged, the global debt-at-risk could increase by an additional 4 percentage points.
“Prolonged conflicts in the Middle East would sharpen this tension, as supply-driven inflation calls for tighter monetary policy, while deteriorating fiscal positions intensify political pressure for accommodation,” the report stated.
The global body added that high debt, rising interest costs, less accommodating markets, and debt-at-risk projections of about 120 per cent of GDP have narrowed fiscal room for maneuver across the world.
Amidst the political tensions that rendered parts of the world’s economies affected, the IMF advised that countries’ fiscal policy should be more forward-looking to preserve stability and reduce the risk of disruptive market pressures.
“Geoeconomic and political tensions have become a persistent feature of the fiscal landscape, and structural vulnerabilities and shifts in sovereign bond markets are amplifying countries’ exposure to changes in investor sentiment.
“In this setting, fiscal policy urgently needs to become more forward-looking, with well-designed adjustment plans to preserve stability and reduce the risk of disruptive market pressures,” the IMF said.
