Nigeria's debt to world bank hits $18.2bn

Nigeria has retained its position as the third-largest debtor to the World Bank's International Development Association (IDA), with outstanding obligations of $18.2 billion as of June 30, 2025. This represents a 10.3% increase from $16.5 billion in June 2024.

Bangladesh remains the largest IDA borrower globally, with its debt stock increasing from $20.5 billion in June 2024 to $22.6 billion in June 2025. Pakistan follows as the second-largest borrower, with its debt rising from $17.9 billion to $19.3 billion over the same period.

Nigeria's debt to the IDA is part of its total external debt stock, which stood at $45.98 billion as of March 2025. The World Bank Group accounts for $18.23 billion, or about 39.7% of Nigeria's total external debt stock.

Economist Dr. Muda Yusuf warned that Nigeria's rising debt should be examined within the context of its Medium-Term Expenditure Framework and annual budgets. He emphasized the importance of debt sustainability, noting that borrowing should always be backed by sound economic reasoning and clear development priorities.

Yusuf stressed that Nigeria should be cautious with foreign loans due to exchange rate risks, and that domestic debt is generally easier to manage. Excessive foreign borrowing could put pressure on the country's reserves and further weaken the exchange rate.

The IDA's top ten borrowers accounted for 61% of its total exposure in 2025, down slightly from 63% in 2024. The Single Borrower Limit, which caps lending to any single country at 25% of the IDA's equity, was set at $51.0 billion for the 2026 fiscal year.

Nigeria's continued presence near the top of the IDA debtor table reflects its persistent financing gap for development spending, particularly in infrastructure, energy access, and poverty reduction programs. A disciplined approach to debt sustainability will be crucial for Nigeria to avoid long-term fiscal distress.