Nigeria’s Debt to IDA Hits $17.1 Billion, Retains Third-Largest Borrower Status

 

Nigeria has maintained the position of the third-largest debtor to the International Development Association, a subsidiary of the World Bank, as its debt rose to $17.1 billion as of September 30, 2024. This represents a $600 million increase compared with the $16.5 billion recorded in June 2024.

Within the last one year, Nigeria’s debt to the IDA has risen by 14.4% to $16.5 billion in June 2024 from $14.3 billion in June 2023. Its debt rose by an additional $2.2 billion in the 2023-2024 fiscal year between July 2023 and June 2024.

For the first time, Nigeria rose through the ranks to join the top three IDA borrowers in June 2024, after coming fourth in 2023. The country has so far acquired $2.8 billion in IDA funding under the President Bola Tinubu administration.

Then come Bangladesh and Pakistan with exposures of $21 billion and $18.5 billion, respectively. Next is India in the fourth position, which owes $15.9 billion, while Ethiopia comes fifth at $13.1 billion. Other top borrowers are Kenya, Tanzania, and Vietnam, each with about $12.2 billion in debt.

Cumulatively, the IDA’s top ten borrowers account for 63% of its total exposure, underlining their heavy dependence on concessional financing. For the FY 2025, the SBL for IDA was at $47.5 billion, and there is still ample room within this threshold for Nigeria’s debts.

In the financial statement, IDA noted that monitoring its top ten borrowers remained essential in managing repayment and disbursement profiles.

Nigeria relies on IDA loans, which feature low interest rates and long repayment terms, as a critical component of its financing strategy. This approach contrasts with its obligations to the World Bank’s International Bank for Reconstruction and Development (IBRD), which offers loans at market rates.

The reliance on concessional funding has intensified under President Tinubu’s administration, which is grappling with inherited debts and implementing fiscal reforms.

Meanwhile, Nigeria spent $3.58 billion servicing external debt in the first nine months of 2024, reflecting a 39.77% increase compared to $2.56 billion during the same period in 2023, data from the Central Bank of Nigeria shows. This is indicative of growing fiscal pressure amidst the lingering economic challenges.