Nigeria’s Foreign Debt Projected to Hit $72.6bn by 2027 Amid Election Spending Pressures – IMF Warns
Nigeria’s external debt is projected to rise sharply to $72.6bn by 2027, according to the International Monetary Fund (IMF), raising fresh concerns about the country’s growing debt burden as it approaches another election cycle. The projection comes from the IMF’s 2026 Article IV Consultation report released on Tuesday, which highlights rising fiscal pressures despite recent macroeconomic reforms.
The Fund estimates that Nigeria’s public external debt will increase from $51.9bn in 2025 to $66.5bn in 2026, before peaking at $72.6bn in 2027—an election year. This represents a 39.9% increase within two years, driven largely by increased borrowing needs linked to poverty pressures, food insecurity, and higher government spending ahead of the polls scheduled for January 2027.
Beyond public debt, the IMF warned that Nigeria’s total external debt—including both public and private obligations—could climb from $109.3bn in 2025 to $132bn in 2027. The report noted that debt sustainability risks are rising, especially as external debt continues to grow faster than export earnings and economic output, putting added pressure on government finances.
The IMF also flagged a worrying trend in debt servicing, projecting that Nigeria will spend an increasing share of its export earnings and revenue on repayment obligations. Interest payments alone are expected to rise from $2bn in 2025 to $3bn by 2027, while debt servicing could consume more than half of federal government revenue throughout the period, limiting fiscal space for development spending.
Despite these concerns, the IMF maintained that Nigeria’s debt situation remains “moderate” in terms of risk of sovereign stress, crediting recent reforms for improving macroeconomic stability. However, it warned that weak revenue generation, election-related spending, and reliance on external borrowing tools—such as proposed Eurobond issuance and a controversial $5bn financing swap—could worsen vulnerabilities if not carefully managed.
source: punch