By NewsBits
Nigeria’s borrowing from the World Bank has risen by 121.46 per cent under the regime of President Muhammadu Buhari that would be handing over to a new president on May 29, after eight years.
It was learnt that the total debt owed to the World Bank Group by Nigeria rose by $7.64bn (N3.52trillion, using the exchange rate of the Central Bank of Nigeria (CBN), which was N460.53 per dollar as of April 23, 2023) in seven years.
Specifically, the country’s indebtedness to the Washington DC, United States-based lender rose from $6.29billion (N2.9trillion) as of December 2015 to $13.93billion (N6.42trillion) as of December 2022, according to data from the external debt stock reports by the Debt Management Office.
The International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank, have over the years advanced loans to Nigeria.
The IBRD lends to governments of middle-income and creditworthy low-income countries, while the IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.
The data showed that in 2016, Nigeria had a debt of $6.29billion from IDA and $3.57million from IBRD, but by 2022, the borrowing through IDA was $13.45billion while the one from IBRD was $487.03million.
A further breakdown over the years showed that Nigeria’s total borrowing from World Bank was $6.67billion in 2016, $8.03bn in 2017, $8.67billion in 2018, $10.1billion in 2019, $11.53billion, and $12.38billikon in 2021. The loans approved by the World Bank to Nigeria are usually tied to different projects across different parts of the country.
For instance, in 2020, the Nigeria Rural Access and Agricultural Marketing Project, which seeks to upgrade rural roads, and improve connectivity and access to local markets and agribusiness services in 13 states, was approved to be co-financed through an IDA credit of $280million, $230million from the French Development Agency, and $65million from the Federal Government of Nigeria.
The Nigeria Digital Identification for Development Project, which will support the National Identity Management Commission to increase the number of persons who have a national identification number to about 150 million in the next three years, was also approved to be co-financed through an IDA credit of $115million, $100million from the French Development Agency, and $215million from the European Investment Bank.
In 2021, the World Bank approved a $700million credit from the IDA for the Nigeria Agro-Climatic Resilience in Semi-Arid Landscapes Project. The bank also approved $500million to help boost access to electricity in Nigeria and improve the performance of the electricity distribution companies in the country.
Rising debt had pushed Nigeria up the World Bank’s top 10 International Development Association borrowers’ list. The World Bank Fiscal Year 2021 audited financial statements, known as the IDA financial statement, showed that Nigeria was rated fifth on the list with $11.7billion IDA debt stock as of June 30, 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 $1.3billion IDA debt within a fiscal year, with the country taking over the fourth top debtor position from Vietnam. This debt differs from the outstanding loan from the World Bank’s International Bank for Reconstruction and Development.
The top five countries on the list slightly reduced their IDA debt stock, except for Nigeria. The World Bank disclosed recently that Nigeria’s debt, which may be considered sustainable for now, is 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.”
