The Federal Government has endorsed Nigeria’s Medium-Term Debt Management Strategy (MTDS) 2024–2027, a policy framework aimed at promoting debt sustainability, fiscal stability, and a deeper domestic securities market.
The approval, disclosed by the Debt Management Office (DMO) in a statement on Saturday, followed the Federal Executive Council’s (FEC) adoption of the strategy.
The MTDS, designed with input from the World Bank and the IMF, is widely regarded as global best practice for public debt management.
According to the DMO, the strategy prioritises balancing government borrowing needs with sustainability goals while minimising cost and risk exposures.
“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 agency stated.
Highlights of the new targets include:
Debt-to-GDP ratio ceiling: 60% by 2027 (up from 52.25% in 2024)
Interest payments-to-GDP cap: 4.5% (from 3.75% in 2024)
Sovereign guarantees-to-GDP limit: 5% (currently 2.09%)
Debt mix adjustment: Domestic-to-external ratio to shift from 48:52 to 55:45
Refinancing risk: No more than 15% of debt maturing within one year
Average time-to-maturity: At least 10 years
FX debt exposure: Capped at 45% of total debt (currently 51.75%)
The framework, according to the DMO, involved consultations with key fiscal and monetary stakeholders, including the Central Bank of Nigeria (CBN) and the Ministry of Finance.
It is also expected to reassure investors and credit rating agencies of Nigeria’s commitment to responsible borrowing and fiscal discipline.
