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 outlook remaining sustainable due largely to improved exchange rate stability, the Central Bank of Nigeria (CBN) has said.
The projection is contained in the CBN’s 2026 Macroeconomic Outlook for Nigeria, which indicates a modest increase from 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 Nigeria’s debt trajectory remains stable, noting that key drivers of debt accumulation in recent years—particularly exchange rate-related valuation effects—are expected to weaken significantly in 2026.
“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.
According to the bank, exchange rate movements were the dominant contributor to debt growth between 2023 and 2025, as sharp currency depreciation inflated the naira value of foreign-denominated debt. However, this trend is expected to taper in 2026, reducing the impact of valuation losses on the overall debt stock.
The CBN added that with valuation pressures easing, debt growth will rely less on one-off adjustments and more on traditional fiscal drivers such as the primary balance, supported by the Tax Act of 2025 and real economic growth.
“With these valuation losses easing, debt growth will depend more on core fiscal fundamentals rather than exchange rate shocks,” the bank noted.
The outlook is further supported by expected tax reforms and stronger economic growth, which should boost government revenues, improve debt service capacity, lower borrowing costs, and strengthen confidence in Nigeria’s medium-term debt sustainability.
Earlier, the World Bank projected that Nigeria’s public debt would fall below 40 per cent of GDP for the first time in over a decade. According to its 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 per cent in 2025 to 4.4 per cent by 2027.
