October 9, 2025

FG Adopts New Medium-Term Debt Strategy to Cut Risks, Boost Fiscal Stability

Victor Eshameh August 24, 2025

Nigeria’s total public debt has grown in recent years as the government increased borrowing to finance budget deficits and infrastructure projects. The new MTDS aims to address concerns about debt sustainability while maintaining access to funding.

man holding nigerian currency in bida

The Nigerian government has approved a new Medium-Term Debt Management Strategy (MTDS) for 2024–2027 aimed at reducing refinancing risks and ensuring debt sustainability. The policy was endorsed by the Federal Executive Council (FEC) following consultations with the Debt Management Office (DMO), the Central Bank of Nigeria (CBN), and the Federal Ministry of Finance, with technical support from the World Bank and the International Monetary Fund (IMF).

The DMO said the MTDS is designed to meet the government’s financing needs while maintaining a balance between cost and risk in the public debt portfolio. It also seeks to optimise the composition of public debt and deepen the domestic securities market through the introduction of new products.

“The key objectives of the MTDS are to meet the Government’s financing needs and payment obligations in the short to medium term, taking into consideration the costs and risks trade-offs in the debt portfolio,” the DMO said in a statement.

Under the new strategy, the government plans to extend the average debt maturity to at least 10 years to reduce refinancing pressure. It will also cut foreign currency-denominated debt from 51.75% to 45% of the total debt portfolio.

Other targets include:

1. Debt-to-GDP ratio: capped at 60% by 2027, up from 52.25% in 2024.
2. Interest payments-to-GDP ratio: limited to 4.5%, compared to 3.75% in 2024.
3. Sovereign guarantees-to-GDP ratio: capped at 5%, up from 2.09% currently.
4. Domestic-to-external debt mix: adjusted from 48:52 to 55:45 in favour of domestic borrowing.

To reduce refinancing risks, debt maturing within one year must not exceed 15% of total debt, while debt maturing within a year as a share of GDP is capped at 5%.

The DMO said the strategy was developed after extensive consultations and is expected to reassure investors, credit rating agencies, and international development partners of the government’s commitment to prudent debt management.

Nigeria’s total public debt has grown in recent years as the government increased borrowing to finance budget deficits and infrastructure projects. The new MTDS aims to address concerns about debt sustainability while maintaining access to funding.

About The Author

Victor Eshameh

Victor Eshameh is a writer and editor at The Workplace Magazine. His work focuses on intelligence, technology, information, and related matters, offering critical insights into innovations transforming contemporary workplaces.

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