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Nigeria Climbs To 3rd Largest Debtor, Increases Borrowing By $2.2bn Under Tinubu
The World Bank may approve an additional four loan projects for Nigeria this year, potentially totaling $2 billion.
Abuja, Nigeria- As of June 30, 2024, Nigeria has emerged as the third-largest debtor to the World Bank’s International Development Association (IDA), marking a significant rise in borrowing under President Bola Tinubu’s administration.
The World Bank’s recent financial reports reveal that Nigeria’s debt to the IDA has surged by 14.4%, growing from $14.3 billion in the fiscal year 2023 to $16.5 billion in FY2024.
This $2.2 billion increase has elevated Nigeria to the top three IDA debtors for the first time, moving up from its previous rank as the fourth-largest borrower in 2023.
The increase in Nigeria’s borrowing is reflective of the country’s ongoing efforts to address its economic challenges, including infrastructure development, poverty alleviation, and social investment programs.
However, it also raises concerns about the nation’s growing debt burden and the sustainability of its financial obligations.
The Tinubu administration, which took office in May 2023, has been actively pursuing international funding to support its ambitious economic and social reform agenda.
In the fiscal year 2024, spanning from July 2023 to June 2024, Nigeria received at least $2.2 billion from the World Bank. This period coincides with President Tinubu’s administration, highlightes Nigeria’s increasing dependence on international financial aid amid domestic economic difficulties.
This debt is specific to the International Development Association (IDA) and does not include any outstanding loans from the World Bank’s International Bank for Reconstruction and Development (IBRD).
Compared to other major IDA debtors, Bangladesh remains the largest borrower, with its debt rising from $19.3 billion in 2023 to $20.5 billion in 2024. Pakistan holds the second position with a stable debt of $17.9 billion during the same period.
India, previously the third-largest borrower with $17.9 billion in 2023, saw its IDA debt decrease to $15.9 billion in 2024, allowing Nigeria to move ahead.
Other IDA borrowers include Ethiopia, which saw its debt increase from $11.6 billion in 2023 to $12.2 billion in 2024.
Kenya and Vietnam each have debts of $12.0 billion. Along with Tanzania, Ghana, and Uganda, these countries make up the top ten IDA debtors, collectively accounting for 63% of the IDA’s total exposure as of June 30, 2024.
The IDA, an essential branch of the World Bank, provides concessional loans and grants to the world’s poorest countries, aiming to foster economic growth, reduce inequality, and improve living conditions in developing regions.
Meanwhile, under Tinubu’s administration, Nigeria has secured a total of $4.95 billion in World Bank loans, amidst growing concerns about rising external debt servicing costs. So far, only about 16% of these new loans have been disbursed.
However, the World Bank may approve an additional four loan projects for Nigeria this year, potentially totaling $2 billion.
According to the Debt Management Office (DMO), Nigeria’s total debt to the World Bank stood at $15.59 billion as of March 31, 2024.
