According to findings, Nigeria’s borrowing from the World Bank increased by 121.46% under the administration of President Muhammadu Buhari (retd.).
Nigeria’s total debt to the World Bank Group went up by $7.64 billion over the seven years (using the Central Bank of Nigeria’s exchange rate of N460.53 per dollar on 23 April 2023), which is N3.52 trillion increased.
In particular, 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, according to data from the external debt stock reports by the Debt Management Office.
World Bank loaned Nigeria via the International Development Association and the International Bank for Reconstruction and Development.
IBRD lends to middle-income & creditworthy low-income countries, while IDA provides concessional loans & grants to the poorest countries’ governments.
The data showed that in 2016, 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.
Breakdown of Debt
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.
The World Bank usually links its loans to specific projects spread across Nigeria. They approved co-financing in 2020 for the Nigeria Rural Access and Agricultural Marketing Project. It would enhance rural transportation and boost market access across 13 states. The finance was sourced from an IDA credit of $280m, $230m from the French Development Agency and $65m from the Federal Government of Nigeria.
The Nigeria Digital Identification for Development Project will increase the national identification number holders to 150 million within three years.
The IDA approved a $700m credit in 2021 for the Nigeria Agro-Climatic Resilience in Semi-Arid Landscapes Project. They also approved $500m to enhance access to electricity in Nigeria and boost the performance of the electricity distribution companies.
The rising debt pushed Nigeria up the World Bank’s top 10 International Development Association borrowers’ list.
Furthermore,
This debt 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.
The World Bank recently disclosed that Nigeria’s debt is costly and vulnerable despite being considered sustainable.
The bank said, “Nigeria’s debt remains sustainable, albeit vulnerable and costly. This is especially due to large and growing financing from the Central Bank of Nigeria”.
cc: Punch Ng
