Post by Arise News (@arisenews)

The International Monetary Fund (IMF) has warned that while Nigeria’s debt remains sustainable and the country faces only a moderate risk of debt distress, rising debt servicing costs are significantly limiting the government’s ability to invest in critical sectors. Speaking on ARISE NEWS, IMF Resident Representative Dr. Christian Ebeke revealed that nearly 50% of federal tax revenues between 2025 and 2028 are projected to go toward interest payments, reducing fiscal space for healthcare, education, security and social protection.

Although Nigeria’s debt-to-GDP ratio remains relatively low compared to many peer nations and its debt profile is largely long-term and balanced between domestic and external obligations, the IMF identified weak revenue generation as the country’s biggest challenge. The Fund urged stronger implementation of new tax laws and broader revenue mobilisation efforts while cautioning against opaque financing arrangements such as the recently approved $5 billion total return swap deal.

The IMF also expressed concern over rising poverty levels, warning that inflation and food costs continue to push more Nigerians into hardship, with the World Bank projecting a poverty rate of 63% by the end of 2025. It called for stronger social safety nets and improved public services to accompany any future tax increases.

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