Nigeria’s World Bank Debt Hits N6 Trillion
Data from the Debt Management Office (DMO), has revealed that Nigeria’s debt to the World Bank under the administration of President Muhammadu Buhari has shot up by 121.46% to $13.93 billion, equivalent to N6.42 trillion.
The total debt owed to the World Bank Group by Nigeria rose by $7.64bn (N3.52tn, using the N460.53 exchange rate of the Central Bank of Nigeria, as at April 23) in seven years.
To be precise, the country’s indebtedness to the Washington DC, United States-based lender rose from $6.29bn (N2.9tn) as of December 2015 to $13.93bn (N6.42tn) as of December 2022.
Blastgist reports that the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD), which make up the World Bank, have over the years advanced loans to Nigeria.
The IBRD lends to governments of middle-income and creditworthy low-income countries, while the IDA provides concessionary loans, also known as called credits and grants to governments of the poorest countries.
In 2016, data showed that Nigeria had a debt of $6.29bn from IDA and $3.57m from IBRD, but by 2022, the borrowing through IDA was $13.45bn while the one from IBRD was $487.03m.
A further breakdown over the years showed that Nigeria’s total borrowing from World Bank was $6.67bn in 2016, $8.03bn in 2017, $8.67bn in 2018, $10.1bn in 2019, $11.53bn and $12.38bn in 2021.
Meanwhile, loans approved by the World Bank to Nigeria are usually tied to different projects across different parts of the country.
In 2021, the World Bank approved a $700m credit from the IDA for the Nigeria Agro-Climatic Resilience in Semi-Arid Landscapes Project.
The bank also approved $500m to help boost access to electricity in Nigeria and improve the performance of the electricity distribution companies in the country.
This rising debt has however pushed Nigeria up the World Bank’s top 10 International Development Association borrowers’ list.
The World Bank Fiscal Year 2021 audited financial statements, known as the IDA financial statement, showed that Nigeria was rated fifth on the list with $11.7bn IDA debt stock as of June 30, 2021.
However, the newly released World Bank Fiscal Year 2022 audited financial statements for IDA showed that Nigeria has moved to the fourth position on the list, with $13bn IDA debt stock as of June 30, 2022.
This shows that Nigeria accumulated about $1.3bn IDA debt within a fiscal year, with the country taking over the fourth top debtor position from Vietnam.
This debt, nonetheless,differs from the outstanding loan from the World Bank’s International Bank for Reconstruction and Development.
The top five countries on the list slightly reduced their IDA debt stock, except for Nigeria.
Moreso, the World Bank disclosed recently that Nigeria’s debt, which may be considered sustainable for now, is vulnerable and costly.
The bank had said,
“Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria.”
