Nigeria has approved a new Medium-Term Debt Management Strategy (MTDS) for 2024–2027, setting out plans to increase domestic borrowing and reduce reliance on foreign currency debt. The strategy, developed with support from the World Bank and the International Monetary Fund (IMF), is intended to balance government financing needs with fiscal sustainability while limiting exposure to market and currency risks.

The Debt Management Office (DMO) said the MTDS focuses on optimizing the composition of public debt and deepening Nigeria’s domestic securities market through new instruments.

Under the new strategy, Nigeria plans to raise the share of domestic debt to 55 percent of the total portfolio, with external debt reduced to 45 percent. Long-term domestic debt will remain dominant, with short-term debt carefully limited, and debt maturing within a year capped at 15 percent of total obligations. The MTDS also targets a minimum average maturity of 10 years for the overall debt portfolio and sets limits on interest rate risk, including maintaining short-term refixing under 15 percent and Treasury bills under 10 percent of total debt.

Foreign currency exposure will also be managed, with external debt restricted to less than half of total debt and short-term foreign debt kept under 10 percent of external reserves. Overall, nominal debt is projected at 60 percent of GDP, interest payments will not exceed 4.5 percent of GDP, and sovereign guarantees are limited to 5 percent of GDP.