The DMO projects debt service will take 71.7% of federal revenue by 2030, above its own 50% limit

The Debt Management Office (DMO) expects debt service to take a growing share of the Federal Government's revenue for the rest of the decade. Its 2024 Debt Sustainability Analysis, released on 9 November, projects the debt service-to-revenue ratio at 71.7% by 2030 in its baseline scenario, well above the 50% limit the report itself recommends, Nairametrics and Daily Trust reported.

The report puts the ratio at 60.6% in 2024 and 44.9% in 2025, and projects it to rise to 51% in 2026, 57.1% in 2027, 57.4% in 2028 and 67.3% in 2029. The DMO puts the rise down to debt service growing faster than revenue. Its baseline assumes an exchange rate of ₦1,500 to the dollar and real GDP growth of 4.8%.

The outlets' figures for the report's harsher cases differ slightly. Nairametrics reported that a shock scenario, which assumes a 30% depreciation of the naira, a fall in real GDP and lower revenue, pushes the ratio to 97.3% in 2030; a passage of the report quoted by Daily Trust gives 97.7%. The same quoted passage puts the baseline 2030 figure at 72.6%, while both outlets' own reports give 71.7%.

The DMO rated Nigeria's debt sustainability as moderate but highly vulnerable. It flagged elevated financing, refinancing and currency risks: non-residents held 49% of public debt, above a 45% threshold, and the average Eurobond spread in late 2024 was 975.58 basis points, above a 600 basis point threshold. It recommended keeping the petrol subsidy removed and the exchange rate unified, collecting more tax, spending more efficiently, selling public assets and relying more on concessional loans.

The debt stock behind the projections

Nigeria's total public debt was ₦166.79 trillion, or $120.93 billion, at the end of June 2026, according to the DMO's quarterly figures held by Dataminal. That is 9.44% more than a year earlier. External debt made up $54.52 billion of the total. Daily Trust reported that the Federal Government spent ₦5.28 trillion on domestic debt service in the first half of 2026, against ₦8.61 trillion in the whole of 2025.

Why it matters

A falling debt-to-GDP ratio does not by itself make debt easier to carry if revenue grows more slowly than interest bills. If the DMO's baseline holds, more than half of every naira the Federal Government collects would go to creditors from 2026, leaving less for capital spending and services, and the margin for a revenue shortfall or a weaker naira would be thin.

What to watch

• New borrowing plans. A World Bank project document seen by Daily Trust shows the Federal Government seeking a $500m loan, $400m from the IBRD and $100m from IDA, as part of a proposed $3.85bn infrastructure financing platform; the Bank lists 25 May 2027 as its estimated approval date.
• Federal revenue collections, on which the DMO's recommendations mainly rest.
• The DMO's debt figures for September 2026, the next quarter in Dataminal's series.