Nigeria’s Debt-to-GDP Ratio Falls to 32.3% as Economy Expands — NRS
Nigeria’s debt-to-GDP ratio has declined for the first time in more than a decade, falling from 38 per cent in 2023 to 32.3 per cent in 2026, according to a report by the Nigeria Revenue Service (NRS).
The development comes despite the country’s total debt stock rising above N159 trillion, with the NRS arguing that the economy is now growing faster than the accumulation of debt.
In an internal report, the revenue agency said the figures showed that Nigeria was moving away from severe macroeconomic difficulties towards a more stable and resilient economy.
The NRS attributed the improvement largely to economic reforms introduced by President Bola Tinubu under the Renewed Hope Agenda, describing the measures as difficult but necessary.
According to the report, the debt-to-GDP ratio declined from 38 per cent in 2023 to 35.5 per cent in 2025 before falling further to 32.3 per cent in 2026.
This means that while Nigeria’s debt has increased in naira terms, economic output has expanded at a faster pace, reducing the proportion of the economy represented by government debt.
The report described the development as the first sustained decline in the debt-to-GDP ratio in more than 10 years.
It also noted an improvement in the government’s debt-servicing burden, with debt service as a proportion of revenue projected to fall from 68 per cent to 53 per cent, based on figures from the International Monetary Fund.
The NRS attributed Nigeria’s previous economic difficulties to four major distortions inherited by the Tinubu administration: an increasingly unaffordable fuel subsidy regime, an opaque foreign exchange system that discouraged investment, declining oil production and a tax system that generated significantly less revenue than its potential.
The country’s external reserves have also increased significantly. According to the report, reserves stood at $51.9 billion as of July 2026, their highest level in 17 years, compared with $3.99 billion in 2023.
Nigeria’s balance of payments position also improved, moving from a deficit of $3.34 billion to a surplus of $2.38 billion in the first quarter of 2026.
The Nigerian stock market recorded substantial growth during the same period. Market capitalisation on the Nigerian Exchange rose from N30.36 trillion in 2023 to N161 trillion in 2026.
The NRS linked the growth to improved investor confidence, bank recapitalisation and increased participation by Nigerian institutions in the capital market.
Tax revenue has also more than doubled, rising from N12.3 trillion in 2023 to N27.1 trillion as of July 2026.
The agency attributed the increase to the digitisation of tax collection, the implementation of four new tax reform laws, the restructuring of the revenue service and measures aimed at closing tax-evasion loopholes.
Oil production has also increased, rising from between 1.2 million and 1.3 million barrels per day in 2023 to 1.73 million barrels per day by July 2026. The figure represents about 104 per cent of Nigeria’s OPEC quota.
The report further stated that Nigeria had become a net exporter of petroleum products for the first time in decades, partly due to the naira-for-crude arrangement involving the government, Dangote Refinery and other local refineries.
Under the arrangement, crude is exchanged for naira rather than dollars, with Ghana reportedly exploring a similar model for its own oil sector.
Exports of non-crude petroleum products also increased by 51 per cent year-on-year to N6.78 trillion in the first quarter of 2026.
The government’s Compressed Natural Gas (CNG) programme has also expanded significantly. The report said more than 100,000 vehicles had been converted to run on gas by 2026, attracting more than $2 billion in investment and creating over 10,000 jobs.
The NRS said CNG could reduce running costs by between 40 and 60 per cent compared with petrol. It added that some commercial drivers had reduced their monthly fuel expenses from about N50,000 to N18,000 after converting their vehicles.
Nigeria’s trade position has also strengthened, moving from a marginal surplus of about N44.7 billion to N7.55 trillion in the first quarter of 2026.
Annual capital importation rose from $3.9 billion in 2023 to $23.22 billion in 2025, while $10.37 billion entered the country in the first quarter of 2026 alone.
The report said foreign portfolio investment remained particularly strong, while foreign direct investment also showed improvement.
On food security, the government’s response included the declaration of a state of emergency in July 2023, the release of strategic grain reserves, establishment of a N100 billion National Agricultural Development Fund, fertiliser distribution and an agricultural mechanisation programme.
The NRS said the combined developments indicated that Nigeria’s economic reforms were beginning to produce broader improvements across debt management, revenue generation, investment, trade, oil production and the real economy.
