Nigeria's total public debt is projected to reach 37.1% of its gross domestic product (GDP) this year, inching close to the government's self-imposed limit of 40%, according to the country's Debt Management Office.

The rise in the debt-to-GDP ratio from 23.4% in September is attributed to new borrowing and a loan-to-bond swap by the central bank.

While the debt stock is considered sustainable, the borrowing space has diminished in comparison to Nigeria's self-imposed debt threshold, as stated in a report by the debt office.

In 2023, Nigeria aims to borrow 8.8 trillion naira ($11.81 billion) to address its budget deficit. Additionally, temporary overdrafts worth 23 trillion naira have been converted into long-term bonds this year.

The debt service-to-GDP ratio is expected to reach 73.5% in 2023, surpassing the government's 50% limit due to challenges in revenue collection.

President Bola Tinubu, who assumed office recently, has initiated a comprehensive reform agenda to tackle Nigeria's mounting debt burden, sluggish economic growth, double-digit inflation, and growing insecurity.

Nigeria anticipates limited access to international capital markets in the near future following a credit downgrade by Moody's in January

. The debt office stated that Nigeria will seek assistance from development finance institutions, export financing, and international banks to bridge the external financing gap.

As of September, Nigeria's total public debt stood at approximately $103 billion.