The World Bank has credited Nigeria’s ongoing economic reforms under President Bola Ahmed Tinubu for what it projects to be the first decline in the country’s debt-to-GDP ratio in more than a decade.
In its latest Nigeria Development Update report titled “From Policy to People: Bringing the Reform Gains Home”, the Washington-based institution said the country’s debt-to-GDP ratio is expected to fall from 49.2 percent in 2024 to 39.8 percent in 2025.
It described the projected reduction as a significant milestone that reflects the government’s commitment to policy reforms aimed at strengthening fiscal resilience.
According to the World Bank, “fiscal resilience, stronger growth, and exchange rate appreciation have helped ease debt pressures,” while the debt service-to-revenue ratio has dropped to levels not seen in many years.
The report noted that the reforms have helped to contain debt vulnerabilities that were previously worsened by high interest obligations and exchange rate depreciation.
Nigeria’s total public debt stood at N149.39 trillion as of the first quarter of 2025, up by N27.72 trillion from the previous year, largely due to valuation effects from a weaker naira.
However, a return to exchange rate stability and improved real GDP growth — which rose to 4.23 percent in the second quarter, the highest in five years — have eased debt pressures and supported a better fiscal outlook.
Since taking office in 2023, President Tinubu has implemented extensive policy measures including the removal of fuel subsidies, foreign exchange market unification, and a shift toward orthodox monetary policy. These actions have improved transparency, restored investor confidence, and laid the foundation for a more balanced fiscal structure.
The World Bank said these reforms have already begun to yield measurable results, both in stabilizing the naira and in improving the country’s debt sustainability indicators.
The institution emphasized that continued implementation of these reforms could enhance fiscal space and allow the government to channel more resources into critical sectors such as infrastructure, education, and health.
It urged Nigeria to sustain momentum by consolidating policy gains and ensuring that the benefits of reform translate to improved living standards for citizens.
The report’s findings come at a time when Nigeria’s macroeconomic indicators are showing early signs of recovery.
The exchange rate has maintained relative stability throughout 2025, while the combination of higher oil production and fiscal reforms has bolstered government revenues.
Analysts said the projected drop in the debt ratio marks a turning point for Africa’s largest economy and signals improving creditworthiness that could strengthen its position in global financial markets.
The World Bank’s recognition of Nigeria’s fiscal progress reinforces market optimism toward the country’s reform agenda and its capacity to sustain economic stability after years of rising debt and structural imbalances.