The Federal Government has approved Nigeria’s Medium-Term Debt Management Strategy for 2024–2027, designed to safeguard debt sustainability, strengthen fiscal stability, and expand the domestic securities market.

In a statement issued on Saturday, the Debt Management Office confirmed that the policy framework received the endorsement of the Federal Executive Council.

The MTDS, formulated with technical assistance from the World Bank and the International Monetary Fund, is regarded as an international benchmark for effective public debt management.

According to the DMO, the MTDS is structured to balance the government’s financing requirements with long-term debt sustainability, while keeping borrowing costs low and reducing exposure to potential risks.

“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; to achieve optimum composition of the public debt portfolio that ensures debt sustainability; and to further deepen the domestic securities market through the introduction of new products,” the statement noted.

Under the revised framework, Nigeria has introduced new debt sustainability benchmarks across key fiscal and risk indicators. These include:

Debt-to-GDP ratio projected to rise from 52.25% in 2024 to a ceiling of 60% by 2027.

Interest payments-to-GDP capped at 4.5 per cent, up from 3.75 per cent in 2024.

Sovereign guarantees-to-GDP limited to 5 per cent compared to the current 2.09 per cent.

Domestic-to-external debt mix adjusted from 48:52 to 55:45, in order to reduce exposure to foreign exchange risks.

Refinancing risk will be contained, with no more than 15% of debt maturing within a year, while debt maturing as a share of GDP is capped at 5%.

Average time to maturity for the debt portfolio is fixed at a minimum of 10 years, to secure longer repayment cycles.

Foreign exchange debt exposure will be reduced, with FX debt capped at 45% of total debt, down from the current 51.75%.

The DMO noted that the MTDS was developed through extensive consultations with key stakeholders in the monetary and fiscal space, including the Central Bank of Nigeria and the Federal Ministry of Finance. Technical guidance from the World Bank and IMF helped align the strategy with international best practices.

The new plan is expected to reassure investors, credit rating agencies, and international partners of Nigeria’s commitment to prudent debt management and fiscal discipline.