IMF projects Nigeria’s Debt-To-GDP To Rise To 33.1% In 2027 Election Year
The International Monetary Fund (International Monetary Fund) has projected that Nigeria’s debt-to-gross domestic product (GDP) ratio will rise to 33.1 percent in 2027, an election year for the country, amid warnings of a worsening global fiscal outlook.
Although the projection represents a downward revision from the 35.3 percent estimate made in October for the same period, it remains higher than the 32.3 percent expected in 2026.
The forecast is contained in the IMF’s latest Fiscal Monitor Report, launched on Wednesday in Washington DC during the ongoing IMF-World Bank Spring Meetings.
On April 15, the Debt Management Office (Debt Management Office) said Nigeria’s total public debt for both federal and state governments rose to N159.27 trillion at the end of the fourth quarter (Q4) of 2025.
The figure represents an increase of N5.98 trillion from the N153.29 trillion recorded in the third quarter (Q3), and N14.6 trillion higher than the N144.67 trillion reported in Q4 of 2024.
President Bola Tinubu had also requested approval from the National Assembly for external loans totalling $6 billion.
In its report, the IMF warned of a deteriorating global fiscal outlook despite signs of resilience in the world economy.
It said global gross government debt rose to nearly 94 percent of GDP in 2025 and is projected to reach 100 percent by 2029, “a level previously reached only in the aftermath of World War II”.
The Fund added:
“Global debt-at-risk three years ahead now stands near 117 percent of GDP, with a gap of roughly 20 percentage points between the median projection and the right tail, underscoring heightened downside risks. Several reinforcing forces could weigh on the fiscal outlook,” the IMF said.
It further warned that geopolitical and market risks could worsen fiscal pressures.
According to the report:
“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. If the conflict is prolonged, the organisation said global debt-at-risk could increase by an additional 4 percentage points.”
“Separately, a correction in artificial intelligence–related asset valuations, in which US stocks fall by 20 percent with spillovers to global financial conditions, could raise global debt-at-risk by a further 2.4 percentage points,” the report stated.
Speaking on the findings, the IMF’s Director of Fiscal Affairs, Rodrigo Valdés, said governments must protect vulnerable populations while preserving price signals that allow economies to adjust.
He stressed the need for countries to rebuild fiscal buffers once conditions stabilise.
“Crisis, of course, require emergency support and people focus on the crisis, but the ability to respond really depends on pre-existing fiscal space, and too often, the needed consolidation is postponed,” Valdes said.
“That only ratchets up squeezing the fiscal space for the next crisis.”
Valdés warned that delays in fiscal adjustments could make future reforms more painful and risk disorderly consolidation.
He said:
“Countries need tangible progress, anchoring credible medium-term fiscal frameworks and clear communication, warning that delay could lead to steeper efforts in the future, and increase the possibility of not having an orderly fiscal consolidation.”
He added that low-income countries must prioritise revenue mobilisation to sustain development and social spending.
“In low-income developing economies, a priority is to strengthen domestic revenue mobilisation to protect social and development spending, and also because we have to recognise that external aid is the gap with that,” he said.
However, he cautioned that fiscal responses must remain disciplined given already high debt levels in many economies.
“It would make just harder the central bank job in terms of inflation control,” Valdés said, warning against broad-based stimulus measures.
He also criticised energy subsidies and tax cuts as inefficient tools for managing shocks.
The IMF executive said such measures “distort price signals, are fiscally costly, regressive, and hard to unwind.”
Boluwatife Enome
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