Nigeria’s debt to the World Bank has increased by 121.46 per cent during the presidency of Muhammadu Buhari.
In seven years, Nigeria’s total debt to the World Bank Group increased by $7.64 billion (N3.52 trillion at the Central Bank of Nigeria’s exchange rate of N460.53 per dollar as of April 23, 2023).
Specifically, the country’s debt to Washington, DC-based lender increased from $6.29bn (N2.9tn) in December 2015 to $13.93bn (N6.42tn) in December 2022, according to data from the Debt Management Office’s external debt stock reports.
Nigeria has received loans over the years from the International Development Association and the International Bank for Reconstruction and Development, which comprise the World Bank.
The IBRD lends to governments of middle-income and creditworthy low-income countries, whereas the IDA provides concessional loans – also known as credits – and grants to governments of the impoverished nations.
In 2016, Nigeria owed $6.29 billion to IDA and $3.57 million to IBRD, but by 2022, the debt owed to IDA was $13.45 billion and the debt owed to IBRD was $487.03 million.
A further breakdown by year revealed that Nigeria borrowed a total of $6.67 billion from the World Bank in 2016, $8.03 billion in 2017, $8.67 billion in 2018, $10.1 billion in 2019, $11.53 billion in 2020, and $12.38 billion in 2021.
Typically, the World Bank’s loans to Nigeria are tied to various initiatives in various regions of the country.
In 2020, the Nigeria Rural Access and Agricultural Marketing Project, which aims to improve rural roads, connectivity, and access to local markets and agribusiness services in 13 states, will be co-financed by an IDA credit of $280 million, $230 million from the French Development Agency, and $65 million from the Nigerian government.
The Nigeria Digital Identification for Development Project, which will assist the National Identity Management Commission in increasing the number of Nigerians with national identification numbers to approximately 150 million over the next three years, has also been approved to be co-financed by an IDA credit of $115 million, $100 million from the French Development Agency, and $220 million from the European Investment Bank.
The World Bank authorised a $700 million IDA credit for the Nigeria Agro-Climate Resilience in Semi-Arid Landscapes Project in 2021.
In addition, the bank approved $500 million to increase access to electricity in Nigeria and enhance the performance of the country’s electricity distribution companies.
The PUNCH recently reported that Nigeria’s rising debt propelled it into the top ten International Development Association borrowers of the World Bank.
The audited financial statements of the World Bank for Fiscal Year 2021, also known as the IDA financial statement, revealed that Nigeria ranked fifth on the list with $11.7bn in IDA debt stock as of June 30, 2021.
However, according to the newly released audited financial statements for IDA for the World Bank’s Fiscal Year 2022, Nigeria has moved up to fourth place on the list, with $13 billion in IDA debt stock as of June 30, 2022.
This indicates that Nigeria accrued approximately $1.3 billion in IDA debt in a single fiscal year, surpassing Vietnam as the fourth-largest debtor in the world.
This debt is distinct from the outstanding loan from the International Bank for Reconstruction and Development of the World Bank.
Except for Nigeria, the top five countries on the list reduced their IDA debt stock marginally, as reported by Punch.
Recently, the World Bank disclosed that Nigeria’s debt, which is currently regarded as manageable, is vulnerable and expensive.
The bank stated, “Nigeria’s debt remains sustainable, albeit vulnerable and expensive, particularly due to the Central Bank of Nigeria’s large and growing financing.”