Federal Government debt to fall over the next five years
The October 2025 Fiscal Monitor published by the International Monetary Fund (IMF) offers an optimistic projection for Nigeria’s public finance trajectory. According to the report, Nigeria’s general Federal government debt as a share of GDP is expected to decline consistently over the next half decade, reaching an estimated 33.8% by 2030. This positive assessment, however, contrasts sharply with current debt dynamics, where Nigeria’s total public debt continues to rise in nominal terms despite expectations of improved fiscal sustainability.
Figures from the Debt Management Office (DMO) illustrate this growing burden. As of June 30, 2025, total public debt had climbed to ₦152.40 trillion, compared to ₦149.39 trillion recorded at the end of March 2025. The three-month period saw a further expansion of the debt portfolio by ₦3.01 trillion, representing a 2.01 percent increase. This upward trend has been driven not only by new domestic and external borrowing but also by the weakening exchange rate, which has amplified the value of external debt obligations when converted into naira.
These developments underscore the need for deliberate policy action aimed at expanding fiscal capacity and easing pressure on public finances. Strengthening revenue mobilization remains one of the most viable avenues for government intervention. Nigeria must boost collections from both oil and non-oil sectors to ensure more resilient and diversified revenue streams. In the oil industry, combating pipeline vandalism and pervasive oil theft is critical.
The government should enforce tougher penalties for offenders and encourage fresh investment in modern, technologically enhanced oil infrastructure capable of replacing aging facilities and improving production efficiency.
Beyond expanding revenue, fiscal prudence must be upheld to stabilize long-term debt levels. This includes reducing unnecessary recurrent spending, improving expenditure transparency, and ensuring that available resources are allocated to high-impact economic priorities.
By pursuing these reforms with commitment and consistency, Nigeria can enhance its fiscal sustainability, strengthen investor confidence, and move closer to the debt outlook envisioned by the IMF for the years ahead.
