Nigeria’s debt to the International Development Association(IDA) grew by $600 million to $17.1 billion as of September 30, 2024 from $16.5 billion recorded in June 2024.
The country’s debt increased to $16.5 billion in June 2024 from $14.3 billion in June 2023, according to the World Bank’s latest financial statements.
Nigeria has retained its position as the third-largest debtor to the World Bank’s International Development Association, with its exposure climbing to $17.1 billion as of September 30, 2024.
The financial statement reveals that the fiscal year which ran between July 2023 to June 2024, saw Nigeria receiving an additional $2.2 billion in loans.
Nigeria rose to the top three IDA borrowers in June 2024, for the first time, moving from its previous fourth position in 2023.
The country has maintained this third-largest debtor position, receiving a total of $2.8 billion from the World Bank’s IDA during Bola Tinubu’s administration.
Bangladesh and Pakistan occupy the first and second positions, with debt exposures of $21 billion and $18.5 billion, respectively.
India, which ranks fourth, maintained its debt at $15.9 billion, while Ethiopia’s debt stood at $13.1 billion.
Other top borrowers include Kenya ($12.4 billion), Tanzania ($12.2 billion), and Vietnam ($12.2 billion).
Read also: Nigeria’s debt service to revenue reduced to 68% from 97% — Tinubu
At the lower end of the list, Ghana and Uganda owe $7 billion and $5 billion, respectively.
The above ten countries account for 63 per cent of IDA’s total exposure, highlighting their heavy reliance on concessional financing.
“As of September 30, 2024, the ten countries with the highest exposures accounted for 63 per cent of IDA’s total exposure. Monitoring these exposures relative to the SBL requires consideration of the repayment profiles of existing loans, as well as disbursement profiles and projected new loans and guarantees,” World Bank’s financial statement stated.
The IDA has set its Single Borrower Limit at $47.5 billion for the full year of 2025, representing 25 per cent of its $190.3 billion equity as of June 30, 2024.
Although Nigeria’s debt remains significant, it is still within the SBL threshold, which the World Bank considers non-restrictive at present.
Nigeria’s loans from the IDA, which offer low-interest rates and extended repayment terms, differ from its obligations to the World Bank’s International Bank for Reconstruction and Development, which provides financing at market rates.
The concessional loans have become a crucial element of Nigeria’s funding strategy, particularly under the administration of President Bola Tinubu, who has been managing inherited debts while implementing reforms.
The Federal Government spent $3.58 billion on servicing foreign debt in the first nine months of 2024, representing a 39.77 per cent increase from the $2.56 billion spent during the same period in 2023, according to data from the Central Bank of Nigeria on international payment statistics.
The significant rise in external debt service payments shows the mounting pressure on Nigeria’s fiscal balance amid ongoing economic challenges.
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