The federal government has approved a new medium-term debt management strategy (MTDS) for 2024–2027, setting a 60 per cent cap on the country’s debt-to-GDP ratio as it seeks to maintain debt sustainability while financing fiscal needs.
The Debt Management Office (DMO), in a statement said the MTDS was developed with technical assistance from the World Bank and the International Monetary Fund (IMF). The plan aims to optimise the structure of public debt, deepen the domestic securities market, and manage refinancing and foreign exchange risks.
“The key objectives of the MTDS are to meet the government’s financing needs and payment obligations in the short to medium term, taking into consideration the costs and risks trade-offs in the debt portfolio,” the DMO said.
According to the new benchmarks, public debt will be capped at 60 per cent of GDP by 2027, up from 52.25 per cent as of December 2024. Interest payments are to remain below 4.5 per cent of GDP, compared to 3.75 per cent in 2024, while sovereign guarantees will be limited to 5 per cent of GDP, from 2.09 per cent.
The domestic-to-external debt ratio has been adjusted to 55:45 from 48:52, with at least 75 per cent of domestic borrowings to be long-term instruments. Debt maturing within one year must not exceed 15 per cent of the total portfolio, and foreign exchange-denominated debt will be capped at 45 per cent of the debt stock.
The DMO noted that Nigeria’s debt currently has an average maturity of 11.05 years and an average time to refixing of 10.74 years, both above minimum thresholds. It said the new strategy “balances cost with risk, ensures debt sustainability, and supports macroeconomic stability.”
