Nigeria has $8.12b loan pending that increase World Bank deb to $21.15b
By Jeph Ajobaju, Chief Copy Editor
Nigeria has $8.12 billion undisbursed loans with the World Bank which, when accessed, will combine with other facilities to raise the country’s debt to the lender from $12.72 billion to $21.15 billion.
Taking the loans will increase by 66.27 per cent Nigeria’s debt to the World Bank, as seen in its audited financial statements for the fiscal year 2022 which show the bank was yet to disburse about $8.12 billion to Nigeria by 30 June.
The loans include $7.60 billion from the International Development Association (IDA) and $514 million from the International Bank for Reconstruction and Development (IBRD), both of them arms of the World Bank.
The undisbursed loan comprises both loans approved but not signed and signed loan commitments.
“Loans are not effective and disbursements do not start until the borrowers and/or guarantors take certain actions and furnish documents,” the World Bank explained.
The IBRD and the IDA have advanced loans to Nigeria for years.
The IBRD lends to governments of middle-income and creditworthy low-income countries. The IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.
The Debt Management Office (DMO) confirmed that Nigeria’s debt to the World Bank amounted to $12.72 billion by 31 March and rose to $13.04 billion by 30 June.
Nigeria owes IDA $12.23 billion and IBRD $486.10 million.
Its debt to the World Bank grew by $660 million in the first six months of 2022 (H1 2022).
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Nigeria, biggest IDA debtor in Africa
IDA debt stood at $12.55 billion in H1 2022, up from $11.97 billion in the fourth quarter of 2021 (Q4 2021). IBRD debt totalled $486 million in H1 2022, up from $410.60 million in Q4 2021, according to reporting by The PUNCH.
Rising debt has pushed Nigeria up the World Bank top 10 IDA borrowers’ list.
The World Bank Fiscal Year 2021 audited financial statements for IDA ranked Nigeria fifth on the list with $11.7 billion IDA debt as of 30 June 2021.
The newly released World Bank Fiscal Year 2022 audited financial statements for IDA rated Nigeria fourth position on the list with $13 billion IDA debt as of 30 June 30 2022.
Nigeria accumulated about $1.3 billion IDA debt within a fiscal year, with the country taking over the fourth top debtor position from Vietnam.
This debt is different from $486 million owed IBRD.
The top five countries on the list reduced their IDA debt within the year, except Nigeria.
Nigeria has the highest IDA debt in Africa. The top three IDA borrowers (India, Bangladesh, and Pakistan) are from Asia.
“Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria,” the World Bank disclosed recently.
It added the debt is also at risk of becoming unsustainable in the event of macro-fiscal shocks and expressed concerns over the cost of debt servicing which disrupts public investment and critical service delivery spending.
