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| The Central Bank of Nigeria headquarters in Abuja. File photograph. Livingstone Imonitie / Wikimedia Commons, CC BY-SA 4.0. |
Nigeria could commit 71.7 per cent of Federal Government revenue to debt servicing by 2030, according to projections in the Debt Management Office’s latest sustainability assessment.
The forecast exceeds the agency’s recommended ceiling of 50 per cent. The DMO attributes the projected increase to debt payments growing faster than government receipts, reducing the resources available for other expenditure.
The figures appear in the agency’s 2024 Debt Sustainability Analysis, which its publication listing dates to 9 November 2026. The assessment examines how government finances could develop under its main assumptions and under adverse economic conditions.
Using a debt service-to-revenue ratio of 60.6 per cent for 2024, the report’s baseline projections put the figure at 44.9 per cent for 2025 and 51 per cent for 2026.
The projected share rises to 57.1 per cent in 2027 and 57.4 per cent in 2028, before reaching 67.3 per cent in 2029 and 71.7 per cent in 2030. These figures belong to the assessment’s projection series rather than a statement of actual expenditure for each year.
The report also anticipates a decline in Nigeria’s public debt relative to the size of its economy. Under the baseline assumptions, the public debt-to-gross domestic product ratio falls from 53.7 per cent in 2024 to 27.3 per cent in 2030.
The two measures assess different aspects of the government’s financial position. Debt-to-GDP compares outstanding obligations with economic output, while the debt service-to-revenue ratio measures payments against the income government collects. A falling debt-to-GDP ratio can therefore accompany increasing pressure on revenue.
Under the adverse scenario described in Nairametrics’ account of the assessment, debt servicing could reach 97.3 per cent of federal revenue by 2030.
That scenario assumes a 30 per cent depreciation of the naira, a two per cent decline in real GDP and a 2.5 per cent reduction in revenue. It puts the public debt-to-GDP ratio at 34.6 per cent in 2030, above the baseline projection.
The DMO assesses Nigeria’s debt sustainability as moderate, while identifying weak revenue collection, exchange-rate depreciation and global economic uncertainty as substantial vulnerabilities. It also highlights risks associated with financing costs, replacing maturing debt and foreign-exchange exposure.
To ease those pressures, the agency recommends stronger tax collection, broader compliance and more efficient public spending. It urges the government to direct expenditure towards investments that support economic growth and generate revenue.
The recommendations also include reducing reliance on fresh borrowing, exploring public-private partnerships for capital projects and considering the privatisation or sale of government assets.
Where borrowing remains necessary, the DMO favours greater use of concessional financing when available to contain costs. It also recommends maintaining petrol subsidy removal and a unified, flexible exchange-rate system, TheCable reported.