DMO warns debt service will consume 72% of FG revenue by 2030

The Debt Management Office's 2024 Debt Sustainability Analysis, released Monday, projects Nigeria's debt service-to-revenue ratio will hit 71.7% by 2030 under its baseline scenario—far above the DMO's own 50% safety threshold. The ratio dips to 44.9% in 2025 before climbing steadily: 51% in 2026, 57.1% in 2027, and 67.3% in 2029. Under a shock scenario (30% naira depreciation, 2% GDP contraction), it reaches 97.3% by 2030, leaving almost nothing for governance.

Paradoxically, public debt-to-GDP is projected to fall from 53.7% to 27.3% by 2030. But the DMO warns this masks the real problem: debt servicing is growing faster than revenue. Eurobond spreads already sit at 975 basis points (threshold: 600), signaling expensive borrowing ahead. Short-term debt share and foreign-held debt both exceed safety thresholds, increasing refinancing and forex risks.

In H1 2026 alone, Nigeria spent $1.82 billion on external debt service and ₦5.28 trillion domestically. Between June 2023–December 2025, debt service costs (₦10.61 trillion) exceeded strategic infrastructure spending (₦6.47 trillion) by ₦4.14 trillion.

The DMO prescribes: sustain PMS subsidy removal, maintain flexible exchange rate, expand tax base via technology and compliance, direct spending to growth-enhancing investments, privatize assets, and prioritize concessional loans. Tax reforms are already underway—the question is whether revenue growth can outpace debt service before the 2026 inflection point.

With ₦11.9 trillion borrowed in 30 months despite reform claims, will the next budget prioritize revenue generation over borrowing, or will Nigerians feel the squeeze through higher taxes and reduced services first?

SOURCE: https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/