Nigeria’s public debt is projected to rise to 34.68 per cent of Gross Domestic Product (GDP) by the end of 2026, with the trajectory expected to remain sustainable amid improved exchange rate stability.
The projection is contained in the Central Bank of Nigeria’s (CBN) 2026 Macroeconomic Outlook for Nigeria.
This, according to the CBN, shows a slight increase from the 33.98 per cent recorded at end-June 2025, reflecting expected new borrowings under continued discretionary fiscal policy actions.
Despite the increase, the apex bank said the country’s debt outlook remains stable, as key drivers of debt accumulation in recent years—particularly exchange rate-related valuation effects—are expected to weaken in 2026.
What the data is saying
According to the CBN, Nigeria’s public debt-to-GDP ratio is projected at 34.68 per cent by end-2026, compared with 33.98 per cent at end-June 2025.
“The public debt is anticipated to remain on a sustainable path in 2026. It is projected at 34.68 per cent of GDP by end-2026 compared with 33.98 per cent at end-June 2025,” the apex bank stated.
The CBN added that the revaluation effect on public debt, which dominated debt growth between 2023 and 2025 due to sharp exchange rate movements, is expected to narrow significantly in 2026 owing to improved exchange rate stability.
The apex bank explained that exchange rate changes were the main contributor to debt growth from 2023 to 2025, as currency depreciation inflated the naira value of foreign-denominated debt.
However, it said this trend is expected to taper in 2026, reducing the impact of valuation losses on the overall debt stock.
“With these valuation losses easing, debt growth will rely less on one-off adjustments and more on traditional factors like the primary balance, supported by the Tax Act of 2025 and real economic growth,” CBN noted.
The outlook, according to CBN, is supported by expected tax reforms and stronger growth, which should boost revenues and reduce reliance on exchange rate-driven debt growth.
What this means
The shift away from exchange rate-induced debt growth suggests that Nigeria’s public debt dynamics in 2026 will be shaped more by core fiscal fundamentals than by external shocks.
Sustained exchange rate stability, stronger revenues, and growth could improve debt service capacity, lower borrowing costs, and strengthen confidence in Nigeria’s medium-term debt sustainability.
What you should know
Earlier, the World Bank projected that Nigeria’s public debt would fall below 40% of GDP for the first time in over a decade.
According to the World Bank’s October 2025 Nigeria Development Update (NDU) themed ‘From Policy to People: Bringing the Reform Gains Home’, economic growth is expected to rise modestly from 4.2% in 2025 to 4.4% in 2027.
