June 10 (THEWILL) — Nigeria’s public external debt is projected to increase by $20.7bn to $72.6bn by 2027, according to the International Monetary Fund, raising concerns about the country’s debt sustainability despite recent macroeconomic reforms.
The projection was contained in the IMF’s 2026 Article IV Consultation Report on Nigeria released on Tuesday.
The Fund estimated that public external debt would rise from $51.9bn in 2025 to $66.5bn in 2026 before reaching $72.6bn in 2027, representing a nearly 40 percent increase within two years.
The IMF attributed the expected rise partly to growing financing needs and spending pressures ahead of Nigeria’s next presidential election in 2027.
It warned that persistent poverty, food insecurity and election-related expenditures could widen fiscal deficits and increase borrowing requirements.
“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.
The projection aligns with data from the Debt Management Office, which showed Nigeria’s public external debt stood at $51.86bn as of December 31, 2025.
Beyond public debt, the IMF forecast that Nigeria’s total external debt stock, including private sector obligations, would rise from $109.3bn in 2025 to $132bn by 2027.
The report also highlighted worsening debt indicators. Public external debt is expected to rise from 17.9 percent of GDP in 2025 to 18.7 percent in 2027, while the debt-to-exports ratio could climb from 82.9 percent to 104.3 percent over the same period.
The IMF further cautioned against Nigeria’s proposed $5bn Total Return Swap financing arrangement, describing such structures as opaque and potentially risky.
IMF Resident Representative, Christian Ebeke, said the transaction could expose the government to margin calls and exchange-rate risks, urging authorities to closely monitor the arrangement and consider more transparent funding alternatives, including Eurobond issuances and concessional financing.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
