Nigeria has now ranked as the third-largest debtor to the World Bank’s International Development Association (IDA), with loan exposure reaching $16.5 billion as of June 2024, according to a financial statement released by the World Bank on June 30, 2024.
This marks a significant increase from the $14.3 billion recorded at the end of 2023, highlighting the country’s growing reliance on concessional loans from the IDA, which provides low-interest, long-term loans to the world’s poorest nations. These loans are designed to promote economic growth, reduce inequalities, and improve living conditions.
“The rise in Nigeria’s debt underscores the challenges the country faces in balancing its fiscal deficit while attempting to drive economic development,” a financial expert commented on the new figures. “These loans are a double-edged sword. They provide much-needed capital for growth but come with a long-term repayment burden.”
Bangladesh currently leads the list with a loan exposure of $20.5 billion, followed by Pakistan at $17.5 billion. Nigeria’s loan exposure of $16.5 billion places it ahead of India, which holds $15.9 billion in loans.
Other countries in the top 10 include Ethiopia ($12.2 billion), Kenya ($12.0 billion), and Vietnam ($12.0 billion). Tanzania, Ghana, and Uganda round out the list with $11.7 billion, $6.7 billion, and $4.8 billion, respectively.
“As of June 30, 2024, the ten countries with the highest exposures accounted for 63% of IDA’s total exposure,” stated the World Bank report, emphasizing the need to closely monitor repayment profiles and future loan disbursements.
Nigeria’s rising debt figures come amid news from the Debt Management Office (DMO) that the nation’s total public debt increased to N121.67 trillion in the first quarter of 2024, up from N97 trillion at the end of 2023.
This surge, according to the DMO, was largely driven by new domestic borrowing and additional disbursements from multilateral and bilateral lenders.
The DMO’s report showed that Nigeria’s total domestic debt stood at N65.65 trillion ($46.29 billion), while external debt reached N56.02 trillion ($42.12 billion). “The current trajectory of Nigeria’s debt suggests a growing challenge for the country’s financial management,” the DMO warned.
