IMF advises Nigeria on debt sustainability amid rising borrowing

The International Monetary Fund IMF has emphasized that Nigeria's increasing debt profile necessitates a focus on sustainability and repayment capacity, rather than a preference for external or domestic borrowing. Abebe Aemro Selassie, Director of the IMF's African Department, stated that borrowing decisions should be based on a comprehensive assessment of debt sustainability. This comes as Nigeria's total public debt reached N159.28tn by December 31, 2025, with both domestic and external financing used to address fiscal deficits. Selassie highlighted that the key concern is maintaining manageable debt levels relative to the country's ability to service obligations without straining public finances. He noted that effective liability management, such as extending debt maturities, can alleviate short-term repayment pressures. Nigeria's debt structure shows domestic debt at N84.85tn and external debt at N74.43tn, accounting for 46.73 percent of the total. In 2025, Nigeria spent $5.21bn on external debt servicing. Nigeria's Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has urged multilateral institutions to reduce financing costs and increase liquidity access for developing economies.