Nigeria has emerged as the third-largest debtor to the World Bank’s International Development Association (IDA), with a loan exposure of $16.5 billion as of June 2024. This was revealed in a financial statement released by the World Bank, dated June 30, 2024.
The IDA, a crucial branch of the World Bank, offers concessional loans and grants aimed at supporting the world’s poorest nations. These loans come with low interest rates and long repayment terms, designed to foster economic development, alleviate inequality, and enhance living conditions in developing countries.
Nigeria’s debt to the IDA saw a significant rise of $2.2 billion in comparison to the $14.3 billion reported at the close of 2023. This increase underscores the growing financial relationship between Nigeria and the World Bank.
Bangladesh and Pakistan currently occupy the top two positions on the IDA debt list, with $20.5 billion and $17.5 billion in loans, respectively. Nigeria follows closely behind, while India ranks fourth with $15.9 billion. Other countries in the top ten include Ethiopia with $12.2 billion, Kenya and Vietnam both with $12.0 billion, Tanzania at $11.7 billion, Ghana with $6.7 billion, and Uganda rounding out the list with $4.8 billion.
According to the World Bank, these top ten debtor nations account for 63% of the IDA’s total loan exposure. The financial institution highlighted the need for careful monitoring of these debts in relation to the Single Borrower Limit (SBL), factoring in repayment and disbursement profiles, as well as future loans and guarantees.
Nigeria’s growing debt burden extends beyond its IDA obligations. The Debt Management Office (DMO) reported on June 20 that the country’s total public debt surged to N121.67 trillion in the first quarter of 2024, a sharp increase from the N97 trillion recorded at the end of 2023.
This rise in debt was attributed to new domestic borrowing by the federal government to address the budget deficit for 2024, alongside disbursements from multilateral and bilateral lenders. Of the total debt, domestic debt stood at N65.65 trillion ($46.29 billion), while external debt amounted to N56.02 trillion ($42.12 billion), reflecting the country’s reliance on both internal and external financing to manage its economic challenges.
Source: hallmarknews.com
