CBN projects Nigeria’s debt-to-GDP ratio to hit 34.68% by 2026

The Central Bank of Nigeria (CBN) has forecast that the nation’s public debt could climb to 34.68 percent of Gross Domestic Product (GDP) by the end of 2026.

The Bank explained that the rise is linked to fresh borrowings expected to support government spending, and it emphasized the importance of maintaining strong fiscal discipline to keep debt at manageable levels.

This projection was contained in its report, “Consolidating Macroeconomic Stability Amid Global Uncertainty”, which outlines Nigeria’s 2026 macroeconomic outlook.

According to the CBN, the estimated figure represents a slight increase from the 33.98 percent recorded as of June 2025.

Despite gains from policy reforms, steady oil prices, and better domestic oil output, the widening fiscal deficit is still a concern.

For 2026, the Federal Government’s retained revenue is estimated at N35.51 trillion, while spending is projected at N47.64 trillion — leaving a fiscal deficit of N12.14 trillion, equivalent to 3.01 percent of GDP.

The Bank said improved non-oil revenue and continued implementation of tax and structural reforms should support the fiscal outlook. However, it warned that weakening fiscal discipline or overspending could fuel inflation, put pressure on the naira, and reduce investor confidence.

The CBN urged policymakers to ensure borrowing remains aligned with medium-term sustainability targets, especially amid global economic uncertainty and volatile capital flows.

It also identified additional risks such as disruptions in crude oil production, adverse weather affecting growth, geopolitical tensions, and rising protectionist trade policies.

A sudden shift in global financial markets, the Bank added, could complicate financing efforts and increase debt servicing burdens.