The Federal Government says its new debt management and financing strategy is already yielding results by reducing Nigeria’s foreign debt exposure and strengthening reliance on domestic borrowing.
The Debt Management Office (DMO) disclosed this in a statement on Sunday, noting that the policy shift is part of measures to ensure debt sustainability and reduce vulnerabilities from external shocks such as exchange rate fluctuations and global interest rate hikes.
According to the DMO, the strategy prioritizes raising a higher proportion of funds from the domestic market while limiting external borrowings to concessional loans and multilateral financing with favorable terms. This, the office said, is designed to safeguard the economy from the volatility of international capital markets.
“The government’s financing plan emphasizes deepening the domestic debt market and reducing exposure to costly foreign loans. This approach has already resulted in a more stable debt profile and minimized risks associated with currency depreciation,” the DMO explained.
It further stated that the new debt framework aligns with the Medium-Term Debt Strategy (MTDS), which seeks to maintain debt at a sustainable level while supporting critical infrastructure projects.
Financial analysts say the approach could help Nigeria better manage its rising debt burden, which stood at over ₦100 trillion in mid-2024. They added that by reducing dependence on Eurobonds and other commercial loans, Nigeria will save significantly on interest payments and foreign exchange risks.
The DMO stressed that while foreign borrowing has not been ruled out entirely, it would only be considered when absolutely necessary and under terms that support long-term economic growth.
The new strategy comes amid government reforms aimed at diversifying revenue sources, improving tax collection, and cutting wastage in public spending.
