Borrowing: Nigeria emerges third-largest debtor in latest ranking

Nigeria has ascended to become the third-largest debtor to the World Bank’s International Development Association (IDA) following a notable increase in its borrowing.

The World Bank’s financial statements reveal that Nigeria’s exposure to the IDA surged by 14.4% in the fiscal year 2023, reaching $16.5 billion in 2024.

This $2.2 billion increase under President Bola Tinubu’s administration has elevated Nigeria from being the fourth-largest borrower in 2023 to a top-three position for the first time. The funds acquired from the IDA are generally allocated to projects aimed at improving infrastructure, enhancing public services, and reducing poverty—essential for Nigeria’s long-term development.

However, this status brings risks. A significant portion of Nigeria’s budget will now be dedicated to debt servicing, potentially restricting expenditure on other critical areas. Additionally, elevated debt levels heighten the country’s exposure to external shocks, such as fluctuations in global interest rates or economic downturns, which could complicate debt repayment.

President Tinubu’s administration continues to seek international financial support to navigate Nigeria’s economic challenges.