IMF Forecasts Nigeria’s Debt-to-GDP Ratio to Decline to 36.4% in 2025, 35% by 2026
Story: written by Zara October 16,2025
The International Monetary Fund (IMF) has projected that Nigeria’s debt-to-GDP ratio will decline from 39.3% in 2024 to 36.4% in 2025, and further drop to 35% by 2026, signaling improved fiscal discipline and economic stability.
According to the IMF’s latest Fiscal Monitor Report, the projection includes Nigeria’s Central Bank overdrafts and liabilities from the Asset Management Corporation of Nigeria (AMCON). The report highlights a gradual strengthening of the country’s debt sustainability outlook, supported by expected fiscal consolidation, stronger revenue generation, and steady economic growth.
A falling debt-to-GDP ratio suggests Nigeria’s public debt burden is shrinking relative to the size of its economy — a positive sign of progress in public finance management and reduced reliance on borrowing.
Globally, the IMF observed that rising interest rates have reshaped debt dynamics, raising borrowing costs and pressuring national budgets. Interest expenses are forecasted to rise from 2% of global GDP in 2020 to 2.9% in 2025, reflecting tighter financial conditions.
IMF Director Vítor Gaspar warned that persistent overspending and growing fiscal deficits could push global debt to unsustainable levels if not addressed. He urged governments, including Nigeria’s, to strengthen fiscal buffers, promote efficient public spending, and focus on growth-oriented investments such as education and infrastructure.
Gaspar emphasized that countries can achieve sustainable growth without necessarily increasing total expenditure by enhancing governance, transparency, and accountability — essential factors for building investor confidence and public trust.
He reiterated the IMF’s commitment to helping member nations like Nigeria design fiscal and structural reforms that boost growth, maintain stability, and ensure long-term economic resilience.
