By Anthony Otaru, Abuja
Nigeria may find it difficult to avoid the International Monetary Fund’s (IMF) projection that its external debt will rise to $72.6 billion by 2027, according to economists Professors Akpan Ekpo and Sheriffdeen Tella, as well as development expert Dr Paul Alaje.
The analysts said weak revenue generation, rising debt-servicing obligations, persistent inflation, foreign-exchange pressures, and the country’s continued dependence on crude oil earnings have combined to place Nigeria on a trajectory that could make the IMF forecast a reality.
Their warning follows the IMF’s latest Article IV Consultation Report, which projects that Nigeria’s external debt will increase from $51.9 billion in 2025 to $72.6 billion in 2027, representing a 39.9 per cent rise within two years.
The Fund noted that growing spending pressures associated with rising poverty, food insecurity and preparations for the 2027 general elections could further strain public finances and increase borrowing requirements.
“Spending pressures from elevated poverty and food insecurity, including in the run-up to the elections, could widen fiscal deficits and increase financing needs,” the IMF stated.
The projection broadly aligns with figures from the Debt Management Office (DMO), which showed that Nigeria’s public external debt stood at $51.85 billion as of December 31, 2025.
Beyond public debt, the IMF projected that Nigeria’s total external debt stock, comprising both public and private-sector obligations, would rise from $109.3 billion in 2025 to $119.3 billion in 2026, and then to $132 billion in 2027.
This represents a $22.7 billion increase over the period, with about $12.7 billion expected to be added in 2027 alone.
Speaking with ThisNigeria, former Vice-Chancellor of the University of Uyo and economist, Prof Akpan Ekpo, said the IMF’s projection reflects the country’s persistent failure to align expenditure with sustainable revenue sources.
“Nigeria may not escape the IMF projection because we are still creating institutions that are not viable and financing them without sufficient revenues,” he said.
Ekpo argued that the debate around Nigeria’s debt sustainability has been distorted by an overreliance on the debt-to-GDP ratio rather than the country’s actual revenue capacity.
“The government always argues that its borrowing remains within acceptable limits because it focuses on the debt-to-GDP ratio. But GDP does not pay debts; revenue pays debts,” he said.
According to him, Nigeria’s revenue base remains weak and vulnerable because of its heavy dependence on oil earnings, which are increasingly uncertain amid fluctuations in global energy markets and the transition to renewable energy.
“Our revenue sources have become scarce, and even oil revenue is unstable. Government must raise enough domestic revenue because oil assets will not last forever,” he said.
Ekpo also warned that election-related spending could worsen inflationary pressures and deepen the country’s borrowing needs.
“During election periods, governments tend to spend more. If the money is not available, they borrow. Unfortunately, many of these borrowings are not transparent enough,” he added.
To avert the looming debt challenge, he urged the government to cut the cost of governance, eliminate wasteful spending and aggressively pursue domestic revenue mobilisation.
Also speaking, Prof Sheriffdeen Tella said Nigeria’s current borrowing pattern suggests that the IMF’s projection may even be realised ahead of schedule if new loans continue to be contracted at the present pace.
“Unless the government stops contracting new loans from now, Nigeria is likely to reach the IMF projection before the middle of 2027,” he warned.
Tella said the implications of unchecked borrowing would extend beyond public finance, affecting poverty levels, economic development and the standard of living of ordinary Nigerians.
“If these loan additions continue, poverty will deepen, underdevelopment will persist, and living standards will decline nationwide as the gap between the rich and the poor widens,” he said.
He called for policies that prioritise productivity, efficient resource management and anti-corruption reforms rather than programmes that disproportionately benefit the political class.
“The government must improve productivity, manage resources efficiently and significantly reduce corruption. The focus should be on delivering real economic benefits to citizens rather than political slogans,” Tella added.
For his part, development economist Dr Paul Alaje said the country’s most pressing debt concern is not the size of the debt stock itself but the growing proportion of government revenue being used to service existing obligations.
“Nigeria’s biggest debt risk is not its debt-to-GDP ratio but its severe debt-service-to-revenue ratio. Debt repayment is consuming a massive fraction of government revenues and restricting available cash,” he said.
According to Alaje, the situation leaves the government with limited fiscal space to fund infrastructure, healthcare, education and other critical development priorities.
He further cautioned against borrowing to finance recurrent expenditures and consumption rather than productive investments that can generate future revenues.
The experts were unanimous that without urgent measures to diversify the economy, boost non-oil revenues, reduce governance costs and strengthen transparency in public finance management, Nigeria may find it increasingly difficult to avoid the debt trajectory projected by the IMF.
Their warning comes amid growing concerns about the sustainability of the country’s fiscal position, as rising debt obligations, inflationary pressures, foreign exchange challenges, and weak revenue growth continue to constrain economic recovery and development.
