DMO sets 60% nominal debt to GDP by 2027

The Debt Management Office (DMO) said it projected 60 per cent nominal debt to Gross Domestic Product (GDP) target for 2027 as against 52.25 per cent declared December 2024. 

The debt office in a circular also said it target a maximum of 4.5 per cent interest payment to GDP as against 3.75 per cent in 2024 and Sovereign Guarantees/GDP with a maximum of five per cent from 2.09 per cent in 2024.

DMO in a circular stated that, “In furtherance of the adoption of international debt practices, Nigeria’s Medium-Term Debt Management Strategy (MTDS) for 2024 – 2027 has been approved by the Federal Executive Council.”

According to DMO, the MTDS is a tool developed by the World Bank and the International Monetary Fund (IMF) for managing public debt and is widely accepted.

The circular explained furthehr that,  “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 preparation of the MTDS usually involves the consideration of alternative funding strategies available  to the Government, as it seeks to meet its financing needs, taking into consideration the cost of borrowing  and the associated risks, while ensuring debt sustainability in the medium to long-term.”

“In preparing the MTDS, the Debt Management Office (DMO) collaborated with other stakeholders in the  monetary and fiscal space. The DMO also received technical support from the World Bank and the IMF.”