MARKET NEWS

This borrowing does not include any outstanding loans from the World Bank’s International Bank for Reconstruction and Development, which is separate from the IDA.

Bangladesh remains the largest IDA borrower globally, with its debt stock increasing from $20.5bn in June 2024 to $22.6bn in June 2025. The South Asian country continues to dominate the exposure table, accounting for the largest single share of the IDA’s loan portfolio.

Pakistan follows as the second-largest borrower, with its debt rising from $17.9bn to $19.3bn over the same period. India, which in prior years ranked ahead of Nigeria, remains a significant IDA borrower despite a decline in its exposure.

Its outstanding debt fell sharply from $15.9bn in June 2024 to $14.2bn in June 2025, a drop of $1.7bn, largely due to repayments outpacing new disbursements.

Ethiopia rounds out the top five, with its debt stock rising from $12.2bn to $14.0bn in the 12-month period. The other countries in the 2025 top ten list reflect shifts in the IDA’s lending profile.

Tanzania’s debt surged from $11.7bn to $13.7bn, moving it ahead of Kenya, which also saw a significant increase from $12.0bn to $13.0bn. Vietnam’s exposure fell from $12.0bn to $11.6bn, causing it to drop in the rankings, while Ghana’s debt climbed from $6.7bn to $7.2bn.

Côte d’Ivoire entered the top ten in 2025 with $6.2bn, displacing Uganda, whose debt stood at $4.8bn in 2024. Overall, the IDA’s top ten borrowers accounted for 61 per cent of its total exposure in 2025, down slightly from 63 per cent in 2024.

This concentration shows the relevance of the Single Borrower Limit, which caps lending to any single country at 25 per cent of the IDA’s equity. For the 2026 fiscal year, the SBL was set at $51.0bn—up from $47.5bn in FY25—well above the current exposure levels of the largest borrowers, meaning the limit is not presently a binding constraint.

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 programmes.

While IDA loans offer more favourable terms than market borrowing, the steady accumulation of such debt adds to Nigeria’s overall public debt burden, raising questions about debt sustainability.

The PUNCH earlier reported that the World Bank approved a total of $8.40bn in fresh loans to Nigeria over the past two years, according to data obtained from the Bank’s official website. The approvals, covering June 2023 to August 2025, cut across 15 projects in energy, education, healthcare, rural infrastructure, and governance.

The amount comprises $1.95bn from the International Bank for Reconstruction and Development and $6.50bn from the International Development Association. Meanwhile, data from the Debt Management Office showed that Nigeria’s total debt to the World Bank rose to $18.23bn as of March 31, 2025.

This marks a $420m increase in just three months since December 2024, when Nigeria’s total exposure to the World Bank stood at $17.81bn. The DMO data showed that borrowings from the International Development Association, the concessional financing arm of the World Bank, rose from $16.56bn in December 2024 to $16.99bn in March 2025.

At the same time, loans from the International Bank for Reconstruction and Development — the non-concessional lending window of the World Bank — remained unchanged at $1.24bn. In total, the World Bank Group now accounts for $18.23bn, or about 39.7 per cent of Nigeria’s total external debt stock, which stood at $45.98bn as of March 2025.

This reflects a marginal increase in the World Bank’s share of the debt portfolio, up from 38.9 per cent recorded in December 2024 and 36.4 per cent at the end of 2023. Further analysis indicates that the World Bank now constitutes 81.2 per cent of Nigeria’s total multilateral debt, which reached $22.43bn in Q1 2025.

This represents a rise from the 79.8 per cent share recorded at the end of 2024 and underlines the central role the institution continues to play in Nigeria’s financing framework.

Economist and CEO of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, earlier said the rising World Bank commitments to Nigeria should be examined within the context of the country’s Medium-Term Expenditure Framework and annual budgets, which already provide for both domestic and foreign borrowing.

He noted that deficit financing is a common feature of budgets worldwide and is not inherently wrong, as it allows governments to make critical investments without waiting to generate all the required revenue upfront.

However, he stressed that borrowing should always be backed by sound economic reasoning and clear development priorities. Yusuf emphasised that the key issue is debt sustainability, which depends primarily on the country’s revenue capacity to service its obligations.

Without a strong cash flow to meet repayment schedules, he warned, Nigeria risks falling into a vicious cycle of borrowing to service existing loans, which would perpetuate fiscal vulnerability.

He said it is essential that projects funded by loans directly support the economy’s capacity to repay. According to him, Nigeria should be cautious with foreign loans due to the exchange rate risks they pose, noting that domestic debt is generally easier to manage.

Excessive foreign borrowing, he warned, could put pressure on the country’s reserves and further weaken the exchange rate. He stressed that a disciplined approach to debt sustainability will be crucial for Nigeria to avoid long-term fiscal distress.