Nigeria entered 2025 carrying a heavier debt burden, as the country’s public debt jumped to 52.25% of GDP by the end of 2024.
The Debt Management Office (DMO) revealed the figure in its Medium-Term Debt Management Strategy (2024–2027), explaining that new borrowings, a weaker naira, and the inclusion of ₦30 trillion in Ways and Means Advancesfrom the Central Bank pushed the ratio above the government’s 40% ceiling.
Currency Pressure Deepens Strain
The jump marks a sharp departure from the recent past.
In 2019, debt accounted for just 19% of GDP; by 2023, it had risen to 40.57%.
Now, the DMO cautions that the ratio could climb further, nearing 60% by 2027, even though it still sits below the 70% benchmark recognised by the IMF and ECOWAS.
Currency depreciation worsened the challenge.
The government budgeted on the basis of ₦800 per dollar, yet the naira ended 2024 at ₦1,535.32 per dollar.
As a result, external debt ballooned in local terms, while the portfolio balance shifted to 57:43 between domestic and external debt, diverging from the original 70:30 target.
Strategy Balances Risk And Growth
Even so, the DMO highlighted areas of progress.
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It lengthened federal debt maturities to over 11 years, kept short-term debt well below its 20% cap, and increased reliance on long-term domestic borrowing.
Looking ahead, the Ministry of Budget and Economic Planning projects steady growth, with GDP expected to rise to 5.5% by 2027.
At the same time, it anticipates inflation easing to 10%, though high interest rates will continue to pressure borrowing costs.
Meanwhile, the government plans to diversify funding sources.
It will expand domestic borrowing, issue Eurobonds, and build on new products such as the Domestic US Dollar Bondlaunched in 2024.
It also intends to roll out ESG-compliant securities when market conditions permit.
Through this new strategy, the DMO signals both opportunity and risk: Nigeria’s debt has grown heavier than ever, yet with tighter management, the country still hopes to carry the load without losing balance.
