# What the DMO's 71.7% debt warning means for Nigeria's budget > The DMO says Nigeria's debt service could reach 71.7% of federal revenue by 2030, well above its own 50% limit. Here is what the Nigeria debt service to revenue ratio means. Business · Binatec Pulse · David Banjo · Published 2026-11-10T09:36:29.000Z · Updated 2026-11-10T08:43:48Z Canonical: https://pulse.binatecagency.com/business/nigeria-debt-service-71-7-percent-revenue-2030-dmo ## Key points - The DMO's baseline projects debt service at 71.7% of Federal Government revenue by 2030, against its recommended 50% ceiling. - In the shock scenario the ratio reaches 97.3% by 2030. - Total public debt was N166.79 trillion at 30 June 2026, but domestic debt service fell to N2.14 trillion in Q2. - The DMO blames debt service growing faster than revenue and urges tax reform and a flexible exchange rate. The Debt Management Office (DMO) has warned that Nigeria's debt service could swallow 71.7% of Federal Government revenue by 2030 under its baseline scenario. The figure comes from the DMO's 2024 Debt Sustainability Analysis and was [reported by Nairametrics](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/) on 9 November; [Tribune Online](https://tribuneonlineng.com/debt-service-burden-may-hit-71-7-by-2030-dmo/) carried the same projection. The DMO's own recommended ceiling is 50%. ## What does the DMO's debt service ratio mean? The debt service-to-revenue ratio shows how much of the money the Federal Government collects goes on paying interest and principal on its debts. The higher it climbs, the less is left for roads, schools, hospitals and salaries. At 71.7%, almost three naira in every four that the government earns would go to creditors. The DMO says the ratio is rising because "debt servicing [is] growing faster than government revenue", according to [Nairametrics](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/). It calls the debt position "moderate but highly vulnerable". ## How does the ratio change year by year? The baseline path in the report, as [Nairametrics sets it out](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/), starts at 60.6% in 2024 and drops to 44.9% in 2025. It then climbs to 51% in 2026, the first year above the 50% line, and continues to 57.1% in 2027, 57.4% in 2028, 67.3% in 2029 and 71.7% in 2030. The shock scenario is far worse: 57.4% in 2026, 70.9% in 2027, 75.3% in 2028, 89.6% in 2029 and 97.3% in 2030. It assumes a 30% depreciation of the naira, a 2% fall in real GDP and a 2.5% cut in revenue. The baseline assumes an exchange rate of N1,500 to the dollar, real growth of 4.8% and a primary balance of 3.8%. Both are projections, not forecasts of what will happen. ## Why does a falling debt-to-GDP ratio not settle the matter? The same report projects public debt falling from 53.7% of GDP in 2024 to 27.3% by 2030 in the baseline scenario, per [Nairametrics](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/). That sounds reassuring, but debt-to-GDP measures the size of the economy against the debt. The service ratio measures what the government can actually pay from what it collects. A country can look light on debt compared with its output and still struggle to meet its repayments if tax revenue is low. ## Where does the debt stand today? The latest DMO figures put Nigeria's total public debt at [N166.79 trillion, or $120.93 billion, at 30 June 2026](https://nairametrics.com/2026/09/26/nigerias-public-debt-rises-to-n166-79-trillion-in-q2-2026/), up N7.44 trillion from N159.35 trillion at the end of March. Domestic debt was N91.59 trillion, 54.91% of the total, and external debt made up the rest. The DMO used the CBN's official rate of N1,379.1842 to the dollar. Debt service fell in the second quarter. Domestic debt service dropped to [N2.14 trillion from N3.14 trillion in the first quarter](https://nairametrics.com/2026/09/26/nigerias-domestic-debt-service-declines-to-n2-14-trillion-in-q2-2026/), with FGN bond interest the largest item at N1.39 trillion. So the stock is growing while the quarterly bill fell for now. The DMO's warning is about the years ahead. Nairametrics adds context from other data in the same report: between June 2023 and December 2025, debt-service costs came to [N10.61 trillion](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/), about N4.14 trillion more than the N6.47 trillion spent on strategic infrastructure, while the Federal Government borrowed N11.9 trillion over the same period. That comparison shows the trade-off the ratio describes: every naira paid to creditors is a naira not spent on building. ## What does the DMO say should be done? According to [Nairametrics](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/), the DMO recommends keeping the petrol subsidy removed, maintaining a unified and flexible exchange rate, and raising revenue through tax reform, a wider tax base, technology and better compliance. It also suggests spending more efficiently on growth-enhancing investment, considering privatisation or asset sales, and using more concessional financing where available. The report also flags three risk indicators above their thresholds: an average Eurobond spread of 975.58 basis points against a 600 threshold, a 1.8% annual change in the short-term debt share against 1%, and a 49% non-resident share of public debt against 45%. ## What does it mean for ordinary Nigerians? A high service ratio does not mean the government cannot pay its debts tomorrow. It means that, unless revenue grows or borrowing slows, each year's budget has less room for everything else. The sharpest test will be 2026 and 2027, when the baseline crosses 50% and keeps rising. Watch the tax reform rollout and the exchange rate, the two levers the DMO itself names. One caution: the ratio comes from the 2024 analysis and was reported in November 2026, and [Nairametrics notes](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/) that the DMO had not yet published the 2023 edition. Treat the projections as the DMO's assumptions at the time, not a fresh forecast. ## Questions people are asking ### What is Nigeria's debt service to revenue ratio? It is the share of Federal Government revenue spent on interest and principal. The DMO projects 71.7% by 2030 in its baseline scenario, against a recommended ceiling of 50%. ### How much is Nigeria in debt? Total public debt was N166.79 trillion, or $120.93 billion, at 30 June 2026, according to DMO figures reported by Nairametrics. ### Which DMO report is this from? The 2024 Debt Sustainability Analysis, as reported by Nairametrics on 9 November 2026. ### Does the shock scenario look worse? Yes. Under a 30% naira depreciation, a 2% GDP fall and a 2.5% revenue cut, the ratio reaches 97.3% by 2030. ## Sources 1. [Nigeria's debt service-to-revenue ratio to hit 71.7% by 2030: DMO](https://nairametrics.com/2026/11/09/nigerias-debt-service-to-revenue-ratio-to-hit-71-7-by-2030-dmo/), Nairametrics 2. [Nigeria's public debt rises to N166.79 trillion in Q2 2026](https://nairametrics.com/2026/09/26/nigerias-public-debt-rises-to-n166-79-trillion-in-q2-2026/), Nairametrics 3. [Nigeria's domestic debt service declines to N2.14 trillion in Q2 2026](https://nairametrics.com/2026/09/26/nigerias-domestic-debt-service-declines-to-n2-14-trillion-in-q2-2026/), Nairametrics 4. [Debt service burden may hit 71.7% by 2030 —DMO](https://tribuneonlineng.com/debt-service-burden-may-hit-71-7-by-2030-dmo/), Tribune Online