Nigeria's Debt Management Office (DMO) has said that the country would be able to sustain its current debt profiles between now and 2029.

In its 2010 Debt Sustainability Analysis (DSA) report, the DMO said Nigeria is at a low risk of distress under what is called "Baseline Scenario."

Nigeria's public debt is currently $31.4 billion and is projected to increase to $38.5 billion this year, with the expected government borrowing limit of $7.1 billion for 2011.

The Net Present Value (NPV) of the country's total debt was 16.2 percent of the GDP in 2010 and "this would fall to 2.2 percent in 2020 and 0.9 percent in 2029 and still remaining well below the indicative threshold of 40 percent."

The DSA however suggested the need for sound fiscal management especially in the light of the likely rise in capital expenditure as a result of the envisaged accelerated economic growth and the sub-optimal non-oil revenue generation and collection process.

Nigeria's average GDP growth rate was 8.2 percent in 2010 and it is expected to be 12.6 percent over 2011-2019. In absolute terms, it translates to $191 billion in 2010 and $900 billion between 2011 and 2029.

The analysis assumed the government will attract massive investment from foreign and domestic sources to facilitate infrastructure development and also projected single digit inflation rate averaging 7.2 percent over 2010-2029.

It however said that under the worst case scenario, Nigeria would not be able to sustain its total debt in the medium to long term.

The DSA report says; "However, under the most Extreme Stress test (severe condition), the total public debt is most vulnerable to real GDP growth at historical average minus 1 standard derivation, as the NPV of the total debt ratio is 42 percent of GDP in 2015, marginally exceeding the 40 percent threshold.