Nigeria is currently the third-largest borrower from the World Bank’s International Development Association (IDA), with its total debt reaching $17.1 billion as of September 30, 2024. This figure has increased by $600 million in just three months, up from $16.5 billion in June 2024. Over the past year, Nigeria’s debt to the IDA has grown significantly; it was $14.3 billion in June 2023, marking a 14.4% increase over the year.
During the fiscal year that ended in June 2024, Nigeria received an additional $2.2 billion in loans from the IDA. This increase has allowed Nigeria to move up from being the fourth-largest borrower to the third-largest borrower for the first time as of June 2024. Since President Bola Tinubu took office, Nigeria has borrowed a total of $2.8 billion from the IDA.
In comparison, Bangladesh and Pakistan are currently the top two borrowers from the IDA, with debts of $21 billion and $18.5 billion, respectively. India follows Nigeria in the fourth position, with a debt of $15.9 billion, while Ethiopia owes $13.1 billion. Other notable borrowers include Kenya ($12.4 billion), Tanzania ($12.2 billion), and Vietnam ($12.2 billion). At the lower end of the borrowing list are Ghana and Uganda, which owe $7 billion and $5 billion, respectively.
Together, these ten countries account for 63% of the total loans provided by the IDA, indicating their heavy reliance on this type of financial assistance. The IDA has set a borrowing limit of $47.5 billion for the fiscal year 2025, which is 25% of its total equity of $190.3 billion as of June 30, 2024. Although Nigeria’s debt is significant, it remains below this borrowing limit, meaning it is still considered manageable by the World Bank.
The loans from the IDA are favorable because they come with low interest rates and long repayment periods, making them different from loans from the World Bank’s International Bank for Reconstruction and Development, which are based on market rates. These concessional loans have become an essential part of Nigeria’s funding approach, especially under President Tinubu’s administration, which is focused on managing existing debt while implementing necessary reforms.
In the first nine months of 2024, the Nigerian government spent $3.58 billion on servicing its foreign debt, which is a 39.77% increase compared to the $2.56 billion spent during the same period in 2023. This sharp rise in debt repayments highlights the growing financial pressure on Nigeria as it faces various economic challenges.
