Nigeria to Spend Over 50% of Revenue on Debt Servicing in 2026 — IMF

 The International Monetary Fund (IMF) has projected that Nigeria will use more than half of its revenue to service debt in 2026.

According to the IMF’s latest country assessment, interest payments will consume 53.7% of government revenue in 2026, up from 53.2% in 2025 and 40.8% in 2024. The ratio is expected to ease slightly to 52.4% in 2027.

The IMF also forecast improvements in key economic indicators, projecting inflation to average 16% in 2026. Gross international reserves are expected to increase from $40.2 billion in 2024 to $58.1 billion in 2026 and $62 billion in 2027.

Speaking on ARISE Television, IMF Resident Representative for Nigeria, Christian Ebeke, said: “Our latest assessment… concludes that Nigeria’s debt is sustainable. And second, the risk of sovereign stress is actually moderate. So we don’t see Nigeria as a high-risk debt-distressed country.”

Ebeke noted that Nigeria’s debt-to-GDP ratio remains in the mid-30% range and compares favourably with many peer countries. He added that the country’s debt structure benefits from a balanced mix of domestic and external borrowing with relatively long maturities.

However, he stressed that the major concern is the share of revenue used for debt servicing, stating: “We actually estimate that in 2025 to 2028, the interest-to-revenue ratio… is actually about 50 percent.”

He warned: “When you have more than 50 percent of your tax collection devoted to repaying interest on your federal government debt, it leaves you very little room to actually pay for health, education, cash transfer, including security.”

Ebeke said the IMF’s focus is on supporting Nigeria’s efforts to boost domestic revenue through effective implementation of recently enacted tax reforms, which he described as critical to improving government finances and reducing fiscal risks.