Nigeria’s debt-to-GDP ratio is projected to fall to 39.8 percent in 2025, marking the first decline in over a decade, according to the World Bank’s latest Nigeria Development Update report.
The Washington-based institution attributed the drop to stronger economic growth, fiscal stability, and improved exchange rate performance. The ratio had stood at 49.2 percent in 2024.
“The debt-to-GDP ratio is projected to decline from 49.2 percent in 2024 to 39.8 percent in 2025, the first decline in more than a decade; and the debt service to revenue dropped significantly to levels not seen in many years,” the report titled From Policy to People: Bringing the Reform Gains Home stated.
The World Bank noted that Nigeria’s fiscal resilience and appreciation of the naira have eased pressure on public debt. “Fiscal resilience, stronger growth, and exchange rate appreciation have helped ease debt pressures,” it said.
Nigeria’s total public debt rose by N27.72 trillion to N149.39 trillion in the first quarter of 2025, driven largely by a previously weak naira that inflated external obligations.
However, with the economy expanding by 4.23 percent in the second quarter — its highest growth in five years — and the naira maintaining relative stability, analysts expect the debt outlook to improve further.
The projected decline reflects renewed confidence in Nigeria’s fiscal reforms and economic direction, signaling gradual recovery after years of debt escalation.
