Nigeria’s Debt to World Bank’s IDA Climbs to $17.1 Billion

Nigeria’s debt to the World Bank’s International Development Association (IDA) rose to $17.1 billion as of September 30, 2024.

According to the World Bank’s financial statements for the fiscal year ending September 2024, this marks a $600 million increase from the $16.5 billion recorded in June 2024.

With this figure, Nigeria remains the third-largest debtor to the IDA, trailing Bangladesh and Pakistan, which owe $21 billion and $18.5 billion, respectively.

A report by The PUNCH noted a 14.4% rise in Nigeria’s debt to the IDA over the past year, climbing from $14.3 billion in June 2023 to $16.5 billion in June 2024. During the fiscal year from July 2023 to June 2024, Nigeria secured an additional $2.2 billion in loans, cementing its position among the top three IDA borrowers—a rank it attained in June 2024, having previously been fourth.

Under President Bola Tinubu’s administration, Nigeria has received $2.8 billion in IDA loans, emphasizing its reliance on concessional financing, characterized by low-interest rates and long repayment periods.

Other top IDA borrowers include India ($15.9 billion), Ethiopia ($13.1 billion), Kenya ($12.4 billion), Tanzania ($12.2 billion), and Vietnam ($12.2 billion). Ghana and Uganda, on the lower end, owe $7 billion and $5 billion, respectively. Collectively, the top ten borrowers account for 63% of the IDA’s total exposure.

The IDA’s Single Borrower Limit (SBL) for FY2025 is set at $47.5 billion, representing 25% of its total equity of $190.3 billion as of June 30, 2024. Nigeria’s debt remains within this threshold, which the World Bank considers non-restrictive.

The World Bank’s financial statements emphasize monitoring loan disbursement and repayment profiles to manage exposures within the SBL.

Meanwhile, Nigeria’s external debt servicing costs have surged. The Federal Government spent $3.58 billion on foreign debt servicing in the first nine months of 2024, a 39.77% increase from $2.56 billion during the same period in 2023, according to the Central Bank of Nigeria’s data.

This rise in debt servicing highlights the fiscal strain Nigeria faces amid ongoing economic challenges, as the Tinubu administration grapples with inherited debt burdens and pursues critical reforms.