IMF Warns Nigeria’s External Debt Could Rise to $72.6bn Ahead of 2027 Elections
Nigeria’s public external debt may increase significantly over the next two years, reaching $72.6 billion by 2027, as concerns grow over rising borrowing requirements and election-related spending pressures.
According to recent projections, the country’s public external debt is expected to rise from $51.9 billion in 2025 to $66.5 billion in 2026 before climbing further to $72.6 billion in 2027, representing a sharp increase within a relatively short period.
The warning comes amid concerns that growing poverty levels, food insecurity and increased government expenditure in the build-up to the 2027 general elections could place additional strain on public finances and widen fiscal deficits.
Analysts also project that Nigeria’s total external debt, including obligations owed by the private sector, could increase from $109.3 billion in 2025 to about $132 billion by 2027.
The report further indicated that the country’s public external debt burden relative to export earnings may worsen during the period, while interest payments on public debt are expected to rise steadily.
Debt servicing is also projected to remain a major challenge, with interest payments likely to consume more than half of the Federal Government’s revenue through 2027.
Concerns were equally raised over the Federal Government’s proposed $5 billion Total Return Swap financing arrangement, with experts warning that such funding structures may expose the country to additional financial risks, especially in the event of currency fluctuations.
Economic observers have advised the government to exercise caution in its borrowing plans and explore alternative financing options capable of supporting development goals without significantly increasing debt vulnerabilities.
Despite the concerns, experts noted that Nigeria still has access to international capital markets and other financing channels that could help meet its funding needs while maintaining fiscal sustainability.
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