Nigeria’s External Debt to Hit $72.6bn by 2027, IMF Warns

Nigeria’s external debt could climb by more than $20 billion over the next two years, reaching an estimated $72.6 billion by 2027, according to the International Monetary Fund (IMF), which has warned that election-related spending pressures may further strain the country’s public finances.

In its 2026 Article IV Consultation Report released on Tuesday, the Fund projected that Nigeria’s public external debt would rise from $51.9 billion in 2025 to $66.5 billion in 2026, before increasing further to $72.6 billion in 2027—representing an increase of nearly 40 per cent within two years.

The IMF cautioned that persistent poverty, worsening food insecurity, and heightened government spending ahead of the 2027 general elections could significantly widen Nigeria’s fiscal deficit and increase its financing needs.

“Spending pressures from elevated poverty and food insecurity, including in the run-up to the elections, could widen fiscal deficit and increase financing needs,” the report stated.

Beyond public debt, the Fund also projected that Nigeria’s total external liabilities, including obligations from the private sector, would rise from $109.3 billion in 2025 to $132 billion by 2027.

It further warned that debt sustainability indicators could deteriorate, with public external debt as a share of exports expected to rise from 82.9 per cent in 2025 to 104.3 per cent by 2027. Interest payments on public debt are also projected to increase from $2 billion to $3 billion over the same period.

According to the IMF, debt servicing will continue to place significant pressure on government finances, with interest payments expected to consume more than half of Federal Government revenue through 2027.

The Fund also raised concerns over the Federal Government’s proposed $5 billion Total Return Swap (TRS) financing arrangement, describing such instruments as opaque and potentially risky.

“The arrangement exposes the government to margin calls if the FX value of the naira securities drops,” it warned.

IMF Resident Representative to Nigeria, Christian Ebeke, advised caution over such financial structures, noting that they often lack transparency.

“These types of structures carry risks. Usually, they are opaque,” he said.

He added that Nigeria still has access to international capital markets and could explore more conventional financing options such as Eurobonds or concessional loans..