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Nigeria’s debt service-to-revenue ratio could reach 71.7% by 2030 under the Debt Management Office’s 2024 Debt Sustainability Analysis baseline scenario. The projection is above the DMO’s recommended 50% threshold and comes after a path that moves from 60.6% in 2024 to 44.9% in 2025 before rising again through the rest of the decade.
Nigeria’s debt service burden could absorb 71.7% of federal revenue by 2030 under the baseline scenario in the Debt Management Office’s 2024 Debt Sustainability Analysis.
That projection is above the DMO’s recommended threshold of 50% for debt service as a share of government revenue. It also marks a sharp rise from the 44.9% projected for 2025, after the ratio stood at 60.6% in 2024.
The DMO’s figures show the debt service-to-revenue ratio at 51.0% in 2026, 57.1% in 2027, 57.4% in 2028 and 67.3% in 2029 before climbing to 71.7% in 2030 under the baseline case.
The agency said Nigeria’s debt sustainability remains moderate, but it is highly vulnerable to weak revenue mobilisation, exchange-rate shocks and global uncertainties.
In a more severe shock scenario, the pressure becomes much heavier. The DMO said the debt service-to-revenue ratio could reach 97.3% by 2030 if Nigeria faces a 30% naira depreciation, a 2% real GDP contraction and a 2.5% decline in revenue.
At the same time, the report projected that public debt-to-GDP would decline from 53.7% in 2024 to 27.3% by 2030 under the baseline scenario. That means the debt stock may look smaller relative to the economy, even as debt servicing remains a major strain on government revenue.
Why it matters
The figures point to a key budget challenge: how much government income is left for other priorities after debt obligations are paid. A rising debt service-to-revenue ratio suggests increasing pressure on public finances even when debt-to-GDP is projected to improve.
The contrast in the DMO analysis is important. It suggests that measuring debt only against the size of the economy may not fully capture pressure on government cash flow, especially where revenue remains weak.
What it means for your money
This has no immediate direct personal-finance action for readers, but it matters for the wider economy because heavy debt-service pressure can constrain public spending room. The DMO’s warning is mainly about government revenue strength, debt costs and vulnerability to exchange-rate and growth shocks.
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What merits close monitoring is whether government revenue improves enough to keep the debt service ratio below the levels flagged in the DMO analysis. Readers should also watch for any official response on revenue mobilisation, borrowing plans and exchange-rate vulnerability, since those factors were identified in the report as major risks.
The shock scenario is especially important to track because it shows how quickly the ratio could worsen if the naira weakens sharply, growth contracts and revenue falls.
The DMO’s latest sustainability analysis says Nigeria’s debt remains moderately sustainable, but debt servicing could still consume nearly 72% of revenue by 2030 under its baseline case and much more under adverse conditions.
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