The Federal Government has unveiled a new Medium-Term Debt Management Strategy (MTDS) for 2024–2027 aimed at reducing Nigeria’s dependence on external borrowing and deepening the domestic debt market.
The plan, approved by the Federal Executive Council (FEC) and coordinated by the Debt Management Office (DMO), seeks to lower external debt exposure from the current 51.75% to 45% of the total public debt portfolio.
Developed with technical support from the World Bank and the International Monetary Fund (IMF), and in collaboration with the Ministry of Finance and the Central Bank of Nigeria (CBN), the strategy is anchored on global best practices in public debt management.
According to the DMO, the framework is designed to strike a balance between government financing needs and debt sustainability, while minimising borrowing costs and associated risks. It also introduces measures to diversify domestic debt instruments, extend repayment cycles, and reduce Nigeria’s exposure to foreign exchange volatility.
Key targets under the 2024–2027 MTDS include:
- Revising the domestic-to-external debt ratio from 48:52 to 55:45.
- Capping sovereign guarantees-to-GDP at 5% (currently 2.09%).
- Limiting refinancing risk to a maximum of 15% of debt maturing within one year.
- Extending average debt maturity to a minimum of 10 years.
- Raising the debt-to-GDP ratio from 52.25% in 2024 to 60% by 2027.
- Increasing interest payments-to-GDP to a ceiling of 4.5%, up from 3.75% in 2024.
The DMO said the strategy would deliver “an optimum composition of the public debt portfolio that ensures sustainability” while boosting investor confidence in the Nigerian domestic market.
Analysts note that the framework could shield the country from external shocks, given global financial market volatility, while enabling the mobilisation of more local capital for infrastructure and development financing.