IMF Predicts Decline in Nigeria's Debt-to-GDP Ratio

The International Monetary Fund (IMF) has released a report indicating that Nigeria's national debt is projected to reach 35.5% of its gross domestic product (GDP) by 2025, amounting to approximately ₦159.2 trillion. However, the IMF forecasts a decline in the debt-to-GDP ratio to 32.2% by 2026, which raises questions given the Nigerian government's plan to raise ₦29.2 trillion in foreign loans for the 2026 budget, potentially increasing public debt to ₦168.08 trillion.

The IMF attributes this optimistic projection to expected GDP growth, estimating Nigeria's GDP will rise to $285.08 billion in 2025 and $377 billion by 2026. Contributing factors include a booming capital market, which recently attracted $15 billion in foreign portfolio investment, and improved crude oil production, despite challenges such as theft.

The report highlights the paradox of rising debt alongside significant economic growth, which could position Nigeria as one of the least indebted countries.