International Monetary Fund (IMF) has projected that Nigeria’s debt-to-gross domestic product (GDP) ratio will rise to 33.1 percent in 2027, a period when the country is expected to hold general elections.
Gatekeepers News reports that the latest estimate represents a downward revision from the earlier 35.3 percent forecast released in October for the same year. However, it is still higher than the 32.3 percent projection for 2026.
This projection was disclosed in the IMF’s recent Fiscal Monitor Report unveiled on Wednesday in Washington DC during the ongoing IMF-World Bank Spring Meetings.
Meanwhile, data released on April 15 by the Debt Management Office (DMO) showed that Nigeria’s total public debt for both federal and state governments climbed to N159.27 trillion as of the fourth quarter (Q4) of 2025.
The figure reflects an increase of N5.98 trillion compared to the N153.29 trillion recorded in the third quarter (Q3), and a rise of N14.6 trillion from the N144.67 trillion posted in Q4 2024. In addition, President Bola Tinubu has requested approval from the National Assembly for external borrowing amounting to $6 billion.
In its report, IMF also warned that the global fiscal outlook is weakening, even though the world economy has shown resilience. It noted that global government debt rose to nearly 94 percent of GDP in 2025 and could hit 100 percent by 2029, “a level previously reached only in the aftermath of World War I!”.
“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,” IMF said.
The organisation added that ongoing tensions in the Middle East could worsen fiscal pressures through rising food and fuel costs, tighter financial conditions, reduced economic activity, and increased defence spending. If the conflict persists, global debt-at-risk could rise by an additional four 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 report, Rodrigo Valdes, IMF director of fiscal affairs, urged governments to prioritise support for vulnerable populations while maintaining price signals that aid economic adjustment. He also called on countries to rebuild fiscal buffers once economic 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.”
He emphasised the need for credible medium-term fiscal plans and clear communication, warning that delays could lead to tougher adjustments later and increase the risk of disorderly fiscal consolidation.
“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.
Valdes further cautioned that with already high debt levels, fiscal responses must not endanger public finances. He advised against discretionary demand stimulus unless conditions significantly change.
“It would make just harder the central bank job in terms of inflation control,” Valdes said.
He also warned against broad energy subsidies or excise cuts, stating they distort price signals, are fiscally costly, regressive, and hard to unwind.
