CBN Forecasts 34.68% Public Debt Rise Of GDP In 2026

The Central Bank of Nigeria (CBN) has projected that Nigeria’s public debt will rise to 34.68% of the Gross Domestic Product (GDP) by the end of 2026.

This reflects expected new borrowings to fund fiscal operations, even as the apex bank stressed the need for strict adherence to fiscal rules to safeguard debt sustainability.

The projection is contained in the Bank’s Macroeconomic Outlook for Nigeria, 2026, titled “Consolidating Macroeconomic Stability Amid Global Uncertainty,” released on Tuesday.

According to the CBN, the projected debt ratio represents a marginal increase from 33.98% of GDP as of the end of June 2025, underscoring an expanding fiscal deficit outlook despite recent improvements in fiscal space driven by policy and institutional reforms, stable crude oil prices, and improved domestic oil production.

The outlook shows that the Federal Government’s retained revenue and expenditure in 2026 are projected at N35.51 trillion and N47.64 trillion, respectively, resulting in a provisional fiscal deficit of N12.14 trillion, equivalent to 3.01% of GDP.

The CBN noted that the optimistic fiscal outlook for 2026 is anchored on sustained growth in non-oil revenue, alongside the continued implementation of the Nigeria Tax Act, 2025, and other structural reforms aimed at strengthening revenue mobilisation.

However, the apex bank cautioned that the rising debt profile could pose risks to macroeconomic stability if fiscal discipline weakens.

It further warned that excessive spending or significant deviation from budgetary benchmarks could undermine inflation moderation, pressure the exchange rate and weaken investor confidence.

The Bank emphasised the importance of fiscal authorities ensuring that borrowing plans remain aligned with fiscal rules and medium-term debt sustainability objectives, particularly in an environment of heightened global uncertainty and volatile capital flows.

In its assessment, the CBN also highlighted broader risks to the fiscal and macroeconomic outlook, including potential disruptions to crude oil production, unfavourable climatic conditions that could dampen output growth, and adverse global developments such as renewed geopolitical tensions and re-escalation of protectionist trade policies.

The outlook warned that a sudden deterioration in global financial market conditions could trigger capital reversals, complicating fiscal financing and increasing debt servicing pressures.