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World Bank lists Nigeria fifth high debt risk exposure countries

Nigeria is currently owing the World Bank a total of $11.7 billion, which put the country among the top 10 countries with high debt risk exposure.

The bank listed Nigeria the fifth among India, Bangladesh, Vietnam and Pakistan.

In its latest financial statement for International Development Association (IDA), the bank also listed other countries, including Ethiopia with $11.2 billion IDA debt stock, Kenya with $10.2 billion IDA debt stock, Tanzania with $8.3 billion IDA debt stock, Ghana with $5.6 billion IDA debt stock, and Uganda with $4.4 billion IDA debt stock.

It added that there was a Single Borrower Limit for IDA, which for FY22, had been set at $45bn (25 per cent of $180.9bn of equity as of June 30, 2021).

It was further discovered that Nigeria’s undisbursed balance with the World Bank is about $8.656bn as at June 30, 2021.

The financial statement for IDA disclosed that Nigeria had a total undisbursed balance of $8.07bn, consisting of $1.462bn loans approved but not yet signed and $6.61bn signed loan commitment.

“As of June 30, 2021, the 10 countries with the highest exposures accounted for 66 per cent of IDA’s total exposure.”

Nigeria was rated fifth on the list with $11.7 billion IDA debt stock, while India led the list with $22 billion IDA debt stock, followed by Bangladesh with $18.1bn IDA debt stock, Pakistan with $16.4 billion IDA debt stock, and Vietnam with $14.1billion IDA debt stock.

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It added that there was a Single Borrower Limit for IDA, which for FY22, had been set at $45bn (25 per cent of $180.9bn of equity as of June 30, 2021).

According to the financial statement for the International Bank for Reconstruction and Development, Nigeria has a total of $589 million undisbursed balance, consisting of $500 millio loans approved but not yet signed and $89m signed loan commitment.

The financial statement said, “IDA faces two types of credit risk: country credit risk and counterparty credit risk.

“Country credit risk is the risk of loss due to a country not meeting its contractual obligations, and counterparty credit risk is the risk of loss attributable to a counterparty not honoring its contractual obligations.

“IDA is exposed to commercial as well as noncommercial counterparty credit risk.”

It stated, “As of June 30, 2021, the 10 countries with the highest exposures accounted for 66 percent of IDA’s total exposure.

Nigeria was rated fifth on the list with $11.7 billion IDA debt stock, while India led the list with $22 billion IDA debt stock, followed by Bangladesh with $18.1billion IDA debt stock, Pakistan with $16.4 billion IDA debt stock, and Vietnam with $14.1bn IDA debt stock.

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