Nigeria’s public debt is projected to increase to 34.68 per cent of the country’s Gross Domestic Product (GDP) by the end of 2026, with authorities expressing confidence that the debt trajectory will remain sustainable amid improving exchange rate stability.
The projection is contained in the Central Bank of Nigeria’s 2026 Macroeconomic Outlook for Nigeria, which provides an assessment of key fiscal and monetary trends expected to shape the economy over the medium term.
Naija247news gathered that the projected figure represents a marginal rise from the 33.98 per cent debt-to-GDP ratio recorded at the end of June 2025. The increase, according to the apex bank, reflects anticipated new borrowings under ongoing discretionary fiscal policy measures by the government.
Despite the projected rise, Naija247news understands that the CBN has maintained an optimistic outlook on Nigeria’s debt sustainability, noting that the major factors that drove rapid debt accumulation in recent years are expected to weaken significantly in 2026.
According to Naija247news, the apex bank explained that exchange rate-related valuation effects were the dominant contributors to Nigeria’s rising public debt between 2023 and 2025, as sharp depreciation of the naira significantly increased the local currency value of foreign-denominated obligations.
“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 CBN stated in the outlook.
Naija247news reports that the CBN expects the revaluation effect on public debt to narrow considerably in 2026 due to improved exchange rate stability. This development, the bank noted, should reduce the impact of valuation losses that previously inflated Nigeria’s overall debt stock.
According to Naija247news, the apex bank said that while exchange rate movements were the primary driver of debt growth over the last three years, this trend is expected to taper as foreign exchange conditions stabilise and macroeconomic reforms take hold.
“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,” the CBN noted.
Naija247news understands that the expected shift signals a structural improvement in Nigeria’s debt dynamics, with public borrowing increasingly tied to core fiscal fundamentals rather than external shocks or currency fluctuations.
The CBN further stated that the outlook is underpinned by anticipated tax reforms and stronger economic growth, which are expected to boost government revenues and reduce excessive reliance on debt accumulation driven by exchange rate depreciation.
According to Naija247news, the central bank believes that sustained exchange rate stability, combined with improved revenue mobilisation, could enhance Nigeria’s debt servicing capacity, lower borrowing costs, and strengthen investor confidence in the country’s medium-term fiscal outlook.
Economic analysts say this transition could mark a turning point for Nigeria’s public finance management, as debt sustainability becomes more predictable and less vulnerable to sudden currency movements.
Naija247news reports that the implications of the outlook extend beyond debt figures, as improved fiscal stability could free up resources for critical infrastructure, social spending and economic diversification efforts.
In a related development, Naija247news understands that the World Bank has also expressed optimism about Nigeria’s debt position. The multilateral lender previously projected that Nigeria’s public debt would fall below 40 per cent of GDP for the first time in more than a decade.
According to Naija247news, the World Bank’s October 2025 Nigeria Development Update, themed ‘From Policy to People: Bringing the Reform Gains Home’, projected that Nigeria’s economic growth would rise modestly from 4.2 per cent in 2025 to 4.4 per cent by 2027.
The report noted that sustained reforms, improved macroeconomic coordination and revenue-enhancing policies would be critical in translating growth gains into tangible improvements in living standards.
Agnes Ekebuike Editor, Naija247news ✔
Agnes Ekebuike is the Editor of Naija247news.com. A seasoned journalist with expertise in Business, Energy, Politics, and Entertainment, she is known for her in-depth reporting and insightful storytelling. Agnes is passionate about delivering news that informs, empowers, and sparks meaningful dialogue across Nigeria and beyond.
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