The International Monetary Fund (IMF), has urged Nigeria and other countries to reduce debt levels, warning that excessive debt suffocates economies.
Kristalina Georgieva, Managing Director (MD) of the IMF, stated this on Monday during the civil society organisation (CSO) town hall at the ongoing annual meetings of the World Bank and IMF.
On October 12, the Debt Management Office (DMO) announced that Nigeria’s total public debt increased to N152.39 trillion as of June 30.
The debt agency said the total domestic debt was N80.55 trillion ($52.67 billion), while the total external debt was N71.84 trillion ($46.98 billion).
Nigeria’s appetite for debt has gained more intensity since President Bola Ahmed Tinubu took office in May 2023, with the nation’s total debt stock in naira increasing by 348.6 per cent in less than two years between June 2023, when it totalled N33.3 trillion, and March this year.
Debt service-to-revenue ratio, which gauges how much of the cash generated by the government goes into repaying debt, stood at 156.8 per cent as of early May, compared to 29.1 per cent as of 2014.
Last week, President Tinubu wrote the parliament for permission to raise fresh $2.3 billion debt in Eurobond and issue $500 million in sukuk. The latter aims to refinance a maturing debt and fund some infrastructural projects in the country.
“Lagos state recorded the highest domestic debt in Q1 2025 with ₦874.03 billion, followed by Rivers with ₦364.39 billion, while Jigawa state recorded the lowest with ₦1.06 billion, followed by Ondo with ₦11.76 billion,” the debt data stated.
Speaking on how world economies can bolster resilience and withstand risks, Georgieva asked countries to prioritise reducing their debt burdens..
“The consequences are that we have to be much much more focused on bringing debt levels down, because very high level of debt suffocates economies,” she said.
“Although ironically, debt levels in advanced economies are still going up, debt levels in emerging markets are still going up”
Furthermore, Georgieva said debt levels are declining in low-income economies, “but they’re going down because they have no access to financing”.
The managing director added, however, that low-income countries are struggling to manage their debt burdens.
“And even if they’re going down, it is still incredibly difficult for low-income countries to cope with these levels of debt,” she added.
The IMF managing director said the fund will focus on policies aimed at reducing debt levels.
Nigeria is classified as a lower-middle-income economy by the World Bank.