MEDIUM TERM DEBT MANAGEMENT STRATEGY

A Strategy guides the Federal Government's borrowing over four years, balancing financing needs with debt sustainability and risk management. It targets the government, sub-national entities, and development partners to minimize costs. This promotes responsible debt management for economic stability.

What Is This Policy?

Nigeria's Medium-Term Debt Management Strategy (MTDS) is a four-year policy framework that guides the Federal Government's borrowing activities — balancing the financing needs of government against debt sustainability, cost minimisation, and risk management objectives, in line with IMF and World Bank best practices.

Who Does It Target?

Federal Government of Nigeria (FGN) as borrower and debt manager Sub-national governments (states and FCT) for external debt obligations included in the framework Development partners, international investors, and rating agencies that assess Nigeria's debt management practices Budget planning MDAs including the Federal Ministry of Finance, CBN, and Budget Office of the Federation

What Does It Aim to Achieve?

Meet the government's financing needs and payment obligations in the short to medium term at minimum cost and risk Maintain Total Public Debt/GDP ratio within sustainable thresholds (below 55% per IMF/World Bank and 70% per ECOWAS) Shift the debt portfolio towards longer-tenured instruments (Average Time to Maturity — minimum 10 years) to reduce rollover risk Deepen the domestic securities market and diversify funding sources (concessional, semi-concessional, and capital markets)

Key Features

Portfolio Optimisation: Balances domestic vs. external debt mix to manage currency and interest rate risk Longer-Tenor Domestic Instruments: New domestic financing through longer-tenor bonds to reduce short-term refinancing risk Concessional Borrowing Priority: Prefers IDA concessional and semi-concessional sources; commercial borrowing used only where concessional is unavailable Sovereign Sukuk Issuance: Sukuk bonds (₦742.56 billion issued 2017–2022) used to finance road infrastructure across six geopolitical zones Debt Sustainability Analysis (DSA): Annual DSA conducted to monitor debt trajectory and ensure long-term sustainability IMF/World Bank Compliance: Strategy formulated using accepted IMF/World Bank templates, improving Nigeria's standing with rating agencies

Current Status

Rollout Stage: Active — MTDS 2024–2027 approved by FEC in 2025 following elapse of MTDS 2020–2023 Implementing Body: Debt Management Office (DMO) in collaboration with FMFBNP, CBN, Budget Office, NBS, and OAGF MTDS 2020–2023 Performance: Average Time to Maturity achieved 12.77 years (2023) and 11.05 years (2024) — both exceeding the 10-year minimum target Debt Stock: Domestic debt grew from ₦22.21 trillion (December 2022) to ₦59.12 trillion (December 2023) due to Ways and Means Advance conversion Exchange Rate Impact: End-period exchange rate USD1/₦1,535.32 (December 2024) significantly affects external debt servicing calculations

How to Access

The MTDS is a government-to-government and institutional policy. Key stakeholders engage through the following channels: Investors: Access FGN bond issuances (treasury bills, FGN bonds, Sukuk, Eurobonds) through the DMO's Domestic Debt Market State Governments: Borrowing by sub-nationals requires DMO approval under the Subnational Borrowing Guidelines Development Partners: World Bank and IMF provide technical assistance to DMO for MTDS formulation and implementation Portal: dmo.gov.ng | FGN bond subscriptions via licensed dealers

Important Terms

Debt Sustainability Threshold: Total Public Debt/GDP must remain below 55% (IMF/WB) and 70% (ECOWAS) convergence criterion Ways & Means Advances: Borrowing from CBN without parliamentary approval has contributed to domestic debt volatility; subject to conversion to long-term bonds

Official Resources

Website: dmo.gov.ng Contact: Debt Management Office, Plot 447/448, Constitution Avenue, Central Business District, Abuja | [email protected] Summary prepared using the Policy Summary Template | Source: DMO Nigeria, FEC Approval 2025, IMF, World Bank | February 2026

Legal Framework

The Medium Term Debt Management Strategy operates under the Debt Management Office (Establishment) Act 2003, the Fiscal Responsibility Act 2007, and the Finance (Control and Management) Act. Constitutional authority derives from Section 21 of the Second Schedule of the 1999 Constitution (public debt on the Exclusive Legislative List). The MTDS aligns with the World Bank and IMF Debt Management Performance Assessment (DeMPA) framework and the OECD Sound Practices for Managing Sovereign Risk.