The International Monetary Fund has warned that Nigeria may spend more than half of its total government revenue on debt servicing by 2026.
The projection highlights growing fiscal pressure as debt obligations continue to consume a large share of national income.
According to the IMF outlook referenced in recent fiscal assessments, Nigeria’s revenue structure is increasingly constrained by rising repayment commitments.
The situation suggests that limited fiscal space may remain for infrastructure, healthcare, and education spending if debt trends continue.
Nigeria’s debt servicing burden has been steadily rising in recent years due to increased borrowing and weaker revenue generation.
Analysts note that exchange rate pressures and high interest costs have also contributed significantly to the growing repayment obligations.
The IMF has consistently cautioned that without stronger domestic revenue mobilisation, debt servicing could continue to crowd out development spending.
In previous assessments, the Fund indicated that Nigeria already spends a substantial portion of its revenue on debt obligations.
The latest projections reinforce concerns that fiscal sustainability remains a key challenge for Africa’s largest economy.
Government officials have defended recent borrowing, stating that funds are being directed toward infrastructure and economic reforms.
However, economic experts argue that without improved revenue performance, debt servicing may continue to limit fiscal flexibility.
The development places renewed attention on Nigeria’s fiscal strategy as policymakers balance growth ambitions with debt commitments.
Observers say the outcome will depend heavily on reforms aimed at boosting revenue and improving economic productivity.