Nigeria’s Debt to IDA Increase to $17 Billion – Report
Nigeria has cemented its position as the third-largest debtor to the World Bank’s International Development Association (IDA), with its outstanding debt reaching $17.1 billion as of September 30, 2024.
The World Bank’s latest financial report for the fiscal year ending September 2024 revealed that Nigeria’s debt to the IDA grew by $600 million in just three months, up from $16.5 billion in June 2024. This marks a 14.4% increase compared to the $14.3 billion debt recorded in June 2023.
During the fiscal year from July 2023 to June 2024, Nigeria received an additional $2.2 billion in loans, propelling the country into the top three IDA borrowers for the first time, up from fourth place in 2023. Under President Bola Tinubu’s administration, Nigeria has received a total of $2.8 billion in IDA loans.
The top two positions are held by Bangladesh and Pakistan, with debt exposures of $21 billion and $18.5 billion, respectively. India, ranked fourth, has a debt of $15.9 billion, while Ethiopia owes $13.1 billion. Other major borrowers include Kenya ($12.4 billion), Tanzania ($12.2 billion), and Vietnam ($12.2 billion). At the lower end of the list, Ghana and Uganda owe $7 billion and $5 billion, respectively.
These ten countries account for 63% of the total IDA exposure, underscoring their heavy reliance on concessional financing.
The IDA has set its Single Borrower Limit (SBL) for fiscal year 2025 at $47.5 billion, which is 25% of its equity base of $190.3 billion as of June 2024. While Nigeria’s debt remains substantial, it is still within the SBL threshold, which the World Bank considers manageable at present.
The IDA’s concessional loans, which offer low-interest rates and extended repayment periods, play a significant role in Nigeria’s financial strategy, especially as the country works to manage inherited debts and implement economic reforms under President Tinubu.
The rising debt burden is reflected in Nigeria’s increasing foreign debt service obligations. In the first nine months of 2024, the Nigerian government spent $3.58 billion on servicing foreign debt, a 39.77% increase compared to the same period in 2023, according to data from the Central Bank of Nigeria. This surge in debt servicing highlights the growing fiscal pressures on the country amid ongoing economic challenges.
