The Federal Government of Nigeria has approved a new Medium-Term Debt Management Strategy (MTDS) for 2024–2027, targeting debt sustainability, fiscal stability, and a deeper domestic securities market, as announced by the Debt Management Office (DMO) on August 23, 2025. Endorsed by the Federal Executive Council, the strategy, developed with World Bank and IMF support, aligns with global best practices for public debt management.
The MTDS aims to balance financing needs with cost and risk minimization. Key targets include capping the debt-to-GDP ratio at 60% by 2027 (up from 52.25% in 2024), limiting interest payments to 4.5% of GDP (from 3.75%), and keeping sovereign guarantees below 5% of GDP (from 2.09%). The domestic-to-external debt mix will shift from 48:52 to 55:45 to reduce forex risks, with foreign exchange debt capped at 45% of total debt (down from 51.75%). Refinancing risks will be managed, with debt maturing within a year limited to 15% and an average debt maturity of at least 10 years.
Formulated with input from the Central Bank of Nigeria and the Federal Ministry of Finance, the strategy signals Nigeria’s commitment to fiscal discipline, reassuring investors and credit rating agencies. The plan builds on the 2020–2023 MTDS, which prioritized domestic borrowing. Amid a 67.12% surge in capital importation to $5.64 billion in Q1 2025 and a 39.98% year-to-date gain in the Nigerian Exchange, challenges like naira volatility (N1,560/$1 in the parallel market) and 21.88% inflation in July highlight the need for prudent debt management.
