Nigeria’s debt to World Bank hits $600bn

Nigeria’s total debts owed to the World Bank Group has risen by $660 just in the first six months of 2022, the Debt Management Office and the financial statements from the Bank have shown.

Data from the Debt Management office ( DMO) indicate that Nigeria’s debt to the World Bank was $12.38 billion as of December 31, 2021.

Meanwhile, the financial statements of the World Bank for the 2022 financial year show that Nigeria owes the lending institution $13.04billion as of June 30, 2022.

Analysts most especially the critics of the federal government have expressed worry over the spate of the federal government borrowings.

Some had also predicted that the federal government would not desist from borrowing in 2022 considering the data obtained from the Central Bank of Nigeria (CBN).

The IBRD lends to governments of middle-income and credit worthy low-income countries while the IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.

Nigeria’s debt to the IDA and IBRD stood at $12.55bn and $486m respectively as of June 30, 2022, compared to $11.97bn and $410.60m in December 32, 2021.

However, the newly released World Bank Fiscal Year 2022 audited financial statements for IDA showed that Nigeria has moved to the fourth position on the list, with $13bn IDA debt stock as of June 30, 2022.

This shows that Nigeria accumulated about $1.3bn IDA debt within a fiscal year, with the country taking over the fourth top debtor position from Vietnam.

This debt is different from the outstanding loan of $486m from World Bank’s International Bank for Reconstruction and Development.

The top five countries on the list slightly reduced their IDA debt stock except Nigeria.

Nigeria has the highest IDA debt in Africa, as the top three IDA borrowers (India, Bangladesh and Pakistan) are from Asia.

The World Bank disclosed recently that Nigeria’s debt, which might be considered sustainable for now, was vulnerable 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.”

However, the Washington-based global financial institution added that the country’s debt was also at risk of becoming unsustainable for now, was vulnerable and costly.

The bank further expressed concerns over the nation’s cost of debt servicing, which according to it, disrupted public investments and critical service delivery spending.