Nigeria’s debt-to-GDP ratio modest amid subnational revenue growth – Presidency

The Presidency on Sunday asserted that Nigeria’s debt-to-GDP ratio remains relatively modest at barely 40% when compared with numerous peer economies and advanced nations. Highlighting comparisons with South Africa at 85%, Egypt at 80%, Ghana at 60%, Kenya at 75%, the United States at 130%, the United Kingdom at 110%, and China at an unofficial 300%, the administration emphasized a significant reduction in the debt service-to-revenue ratio, which fell from nearly 100% in December 2022 to less than 60%.

Special Adviser to the President on Information and Strategy Bayo Onanuga issued a statement titled “Facts, Not Fear: A Point By Point Response To Atiku Abubakar On Nigeria’s Reform Journey”. He explained that this notable achievement demonstrates improved revenue efficiency coupled with conservative and astute debt management. Nevertheless, the Presidency posed a fundamental question regarding whether borrowing effectively funds investments that expand productive capacity and future revenues rather than merely postponing difficult choices.

Describing economic reforms as ongoing processes rather than isolated events, the Presidency noted that judging a programme solely by its initial, painful phase resembles judging chemotherapy entirely by its side effects while ignoring remission. Following the foreign exchange-rate reset, Nigeria’s dollar-denominated GDP initially contracted to approximately $253 billion. Data from statistical bodies and multilateral agencies such as the International Monetary Fund indicate a subsequent recovery to roughly $377 billion, marking a 49% increase from that post-adjustment trough.

Similarly, naira-denominated GDP expanded from about ₦314 trillion in 2024 to approximately ₦530 trillion, reflecting a 69% increase driven by higher economic activity and price adjustments. The administration stressed that these metrics must be evaluated alongside real GDP growth, inflation, and household welfare to prove that the economy did not remain stagnant during its most challenging period. Furthermore, officials stated that the reforms were designed to correct structural distortions originating from the 1999–2007 Obasanjo-Atiku administration.

Addressing debt sustainability, the Presidency maintained that debt alone does not define fiscal health, emphasizing that revenue-generating capacity, borrowing purposes, and productive investments are far more critical. Nigeria’s borrowings have strictly served long-term infrastructural and investment purposes in accordance with the law.

The removal of the petrol subsidy has notably improved revenues accruing to state and local governments via the Federation Account. Independent assessments by the World Bank confirm that these expanded statutory allocations have boosted subnational capital spending for roads, schools, hospitals, and social programmes. According to the Presidency, President Bola Tinubu has tactically shifted socioeconomic responsibilities to subnational governments alongside requisite funding, delivering true federalism and economic restructuring.