Nigeria’s Foreign Debt to Reach $72.6bn by 2027, IMF Projects
Nigeria’s public external debt is projected to rise from $51.9bn in 2025 to $72.6bn by 2027, according to the International Monetary Fund’s 2026 Article IV Consultation Report.
This represents a 39.9% increase in two years, raising concerns about the country’s debt sustainability.
The IMF warned that election-year spending pressures, combined with poverty and food insecurity, could widen fiscal deficits and increase borrowing needs.
“Spending pressures from elevated poverty and food insecurity, including in the run-up to the elections, could widen fiscal deficit and increase financing needs,” the Fund stated.
Total external debt, including private obligations, is expected to climb from $109.3bn in 2025 to $132bn in 2027, with debt service indicators worsening. Interest payments on public debt are projected to rise from $2bn in 2025 to $3bn in 2027.
The IMF noted that debt servicing continues to consume more than half of government revenue, estimating that 53.2% of federal revenue went to interest payments in 2025, with similar levels expected through 2027.
Concerns were raised about Nigeria’s plan to raise $5bn through a Total Return Swap (TRS) with First Abu Dhabi Bank. IMF Resident Representative Christian Ebeke cautioned that such structures are “opaque” and could expose Nigeria to margin calls if naira-denominated collateral loses value.
Despite rising debt, the IMF assessed Nigeria’s sovereign stress risk as moderate, citing stronger growth, naira appreciation, and reforms that improved macroeconomic stability. Nigeria’s debt-to-GDP ratio fell to 36.1% in 2025 from 39.3% in 2024.
The Fund projected Nigeria’s economy to grow by 4.1% in 2026 and 4.3% in 2027, though inflationary pressures from global conflicts could weigh on households.
It urged the government to expand cash transfer programmes and sustain reforms in infrastructure, electricity, agriculture, and healthcare.