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Nigeria’s debt to World Bank rises 121% to $13.9 bln, now top 4 debtor nations

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Nigeria’s borrowing from the World Bank, just like debt from other multilateral and bilateral institutions has increased by 121.46 percent during the administration of President Muhammadu Buhari.

The country’s overall debt to the World Bank Group has increased by $7.64 billion (N3.52 trillion, using the Central Bank of Nigeria’s exchange rate of N460.53 per dollar as of April 23, 2023) in seven years, according to a calculation by The Punch.

Data from the Debt Management Office’s external debt stock reports, the country’s debt to the Washington, DC-based lender increased from $6.29 billion (N2.9 trillion) in December 2015 to $13.93 billion (N6.42 trillion) in December 2022.

The World Bank, comprised of the International Development Association and the International Bank for Reconstruction and Development, has granted loans to Nigeria over the years.

The IBRD lends to governments of middle-income and creditworthy low-income countries, whereas the IDA grants and makes concessionary loans to governments of the poorest countries.

According to the data, Nigeria had an IDA debt of $6.29 billion and an IBRD debt of $3.57 billion in 2016, but by 2022, the IDA debt had increased to $13.45 billion and the IBRD debt had decreased to $487.03 million.

Further analysis over the years revealed that Nigeria’s total borrowing from the World Bank was $6.67 billion 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.

The World Bank’s loans to Nigeria are typically related to various projects in various sections of the country.

For example, in 2020, the Nigeria Rural Access and Agricultural Marketing Project, which aims to upgrade rural roads and improve connectivity and access to local markets and agribusiness services in 13 states, was approved to be co-financed by an IDA credit of $280 million, a French Development Agency credit of $230 million, and a Federal Government of Nigeria credit of $65 million.

The Nigeria Digital Identification for Development Project, which will assist the National Identity Management Commission in increasing the number of people with a national identification number to approximately 150 million over the next three years, has also been approved for co-financing with a $115 million IDA credit, a $100 million French Development Agency credit, and a $215 million European Investment Bank credit.

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The World Bank awarded a $700 million IDA credit for the Nigeria Agro-Climatic Resilience in Semi-Arid Landscapes Project in 2021.

The bank also granted $500 million to help increase access to energy in Nigeria and improve the operation of the country’s electrical distribution businesses.

According to the PUNCH, growing debt has pushed Nigeria up the World Bank’s ranking of the top ten International Development Association borrowers.

Nigeria was ranked fifth in the World Bank’s Fiscal Year 2021 audited financial accounts, known as the IDA financial statement, with $11.7 billion in IDA debt stock as of June 30, 2021.

However, according to the freshly disclosed World Bank Fiscal Year 2022 audited financial statements for IDA, Nigeria has risen to fourth place, with $13 billion in IDA debt stock as of June 30, 2022.

This demonstrates that Nigeria accumulated almost $1.3 billion in IDA debt in a fiscal year, surpassing Vietnam to become the fourth largest debtor.

This debt is distinct from the World Bank’s International Bank for Reconstruction and Development loan.

Except for Nigeria, the top five nations on the list cut their IDA debt stock marginally.

The World Bank recently revealed that Nigeria’s debt, while now considered sustainable, is susceptible and costly.

The bank said, “Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria.”

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