The Federal Government has approved Nigeria’s medium-term debt management strategy for 2024 to 2027, setting the country’s debt-to-GDP ratio at a maximum of 60 percent by 2027. The Debt Management Office said the framework was developed with support from the World Bank and International Monetary Fund to ensure debt sustainability while meeting financing needs.
According to the DMO, the plan aims to balance borrowing costs with risks, deepen the domestic securities market, and optimise Nigeria’s debt portfolio. It added that the strategy takes into account alternative funding options, the cost of borrowing, and associated risks in the medium to long term.
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Under the new benchmarks, interest payments are capped at 4.5 percent of GDP, while sovereign guarantees are to remain below 5 percent. The domestic to external debt mix has been revised to 55 to 45 percent, with at least 75 percent of domestic borrowing in long-term instruments. Refinancing risk will also be contained, with debt maturing within one year not exceeding 15 percent of the total portfolio.
The agency further noted that foreign exchange debt will be limited to 45 percent of the total debt stock. It added that Nigeria’s average debt maturity of 11.05 years and average time to refixing of 10.74 years already exceed minimum thresholds, indicating relative stability in the country’s debt structure.
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