Nigeria has become the third-largest debtor to the World Bank’s International Development Association, IDA, as of June 30, 2024.
This significant development underscores a major shift in the nation’s financial dynamics under President Bola Tinubu’s administration.
The latest financial statements from the World Bank disclosed that Nigeria’s debt to the IDA has surged by 14.4%, increasing from $14.3 billion in fiscal year 2023 to $16.5 billion in 2024. This $2.2 billion rise has elevated Nigeria from its previous position as the fourth-largest borrower to the third.
During the fiscal year 2024, which spans from July 2023 to June 2024, Nigeria received a minimum of $2.2 billion in loans from the World Bank. This period aligns with President Tinubu’s tenure, highlighting the country’s escalating reliance on international financial aid amid domestic economic challenges.
It is important to note that this debt pertains solely to the IDA and excludes loans from the World Bank’s International Bank for Reconstruction and Development.
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In comparison, Bangladesh remains the largest IDA debtor, with its debt rising from $19.3 billion in 2023 to $20.5 billion in 2024. Pakistan holds the second position with a stable debt of $17.9 billion. India, formerly the third-largest debtor with $17.9 billion in 2023, has seen its IDA debt decrease to $15.9 billion, allowing Nigeria to surpass it.
Other notable borrowers include Ethiopia, which saw its debt increase from $11.6 billion in 2023 to $12.2 billion in 2024, while Kenya and Vietnam each have debts of $12.0 billion. These nations, along with Tanzania, Ghana, and Uganda, make up the top ten IDA debtors, collectively representing 63% of the IDA’s total exposure as of June 30, 2024.
The IDA, a critical component of the World Bank, offers low-interest loans and grants to the world’s poorest countries, aiming to foster economic growth, reduce inequalities, and improve living conditions in developing regions.
Amid rising concerns over Nigeria’s growing external debt, reports indicate that the country secured a total of $4.95 billion in loans from the World Bank during President Tinubu’s administration.
However, only about 16% of these new loans have been disbursed to date. The World Bank is expected to consider an additional four loan projects for Nigeria this year, potentially totaling $2 billion.
The Debt Management Office noted that Nigeria’s total debt to the World Bank was $15.59 billion as of March 31, 2024.
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