ABUJA — The International Monetary Fund (IMF) has projected that Nigeria will allocate 53.7 percent of its federal revenue toward debt servicing in 2026. This figure, highlighted in the Fund's latest Article IV Consultation report published on June 9, 2026, reflects a marginal increase from the 53.2 percent estimated for 2025.

The projection underscores the fiscal pressures facing the Nigerian government, as high interest-to-revenue ratios continue to constrain the state's capacity to fund critical services. According to IMF estimates, this ratio is expected to ease slightly to 52.4 percent by 2027.

Debt Sustainability and Fiscal Concerns

Despite the significant portion of revenue required to manage interest payments, the IMF maintains that Nigeria’s overall debt remains sustainable and the risk of sovereign debt distress is moderate. Speaking on ARISE Television on Tuesday, June 16, 2026, Dr. Christian Ebeke, the IMF Resident Representative for Nigeria, emphasized that the country’s debt-to-GDP ratio hovering in the mid-30 percent range compares favorably with many peer nations.

However, Dr. Ebeke acknowledged that the high concentration of revenue used for debt servicing is a primary concern. He noted that when over half of tax collections are devoted to repaying interest, it leaves very little fiscal room to adequately fund essential areas such as healthcare, education, social safety nets, and security.

Macroeconomic Outlook

The IMF’s latest assessment also provided updated projections for other key economic indicators:

  • Inflation: The Fund forecasts an average annual inflation rate of 16 percent for 2026. While inflation rose to 15.4 percent in March 2026 due to international fuel and food price shocks, the IMF projects a disinflation path to continue in the second half of the year.

  • Economic Growth: Nigeria’s real GDP growth is projected to reach 4.1 percent in 2026, supported by ongoing reforms aimed at macroeconomic stability.

  • Resilience: The Fund commended the authorities for their recent focus on tax reforms and the recapitalization of banks, which have helped maintain a resilient financial system.

To mitigate fiscal vulnerabilities, the IMF advised the Nigerian government to prioritize the effective implementation of new tax laws to strengthen domestic revenue mobilization. The Fund maintains that continuing with a neutral fiscal stance and maintaining a tight monetary policy will be crucial to anchoring inflation expectations and preserving long-term economic stability.