IMF Warns Nigeria’s Debt May Hit $72.6bn

By Babatunji Wusu Nigeria’s public external debt could rise sharply to $72.6 billion by 2027, according to new projections from the International Monetary Fund (IMF), which has also warned that spending pressures ahead of the 2027 general elections may increase the country’s borrowing requirements.

In its 2026 Article IV Consultation Report, the IMF forecast that Nigeria’s public external debt would grow from $51.9 billion in 2025 to $66.5 billion in 2026, before reaching $72.6 billion in 2027. This represents an increase of nearly 40 per cent within two years.

The Fund noted that rising poverty levels, food insecurity and election-related spending could place additional strain on public finances and widen fiscal deficits.

“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 IMF stated.

The report further projected that Nigeria debt outlook would become more challenging as the country’s total external debt, including obligations from the private sector, is expected to increase from $109.3 billion in 2025 to $132 billion by 2027.

According to the IMF, the ratio of public external debt to exports could rise from 82.9 per cent in 2025 to 104.3 per cent in 2027. Interest payments are also expected to climb from $2 billion to $3 billion during the same period, with debt servicing projected to consume more than half of federal government revenue through 2027.

The IMF also expressed concerns about the Federal Government’s proposed $5 billion Total Return Swap (TRS) financing arrangement. The Fund warned that such structures often lack transparency and may expose the government to significant financial risks if the value of naira-denominated securities falls.

IMF Resident Representative to Nigeria, Christian Ebeke, echoed those concerns, saying, “These types of structures carry risks. Usually, they are opaque.”

He added that Nigeria could consider alternative funding options, including Eurobonds and concessional financing, given its existing access to international capital markets.