Nigeria Holds $8.25 Billion Undisbursed World Bank Loan as of July 2023
Nigeria currently holds approximately $8.25 billion in undisbursed loans from the World Bank as of July 2023, according to data retrieved by The PUNCH from the World Bank’s Summary Statement of Loans/Credit/Grants. This includes $7.45 billion from the International Development Association (IDA) and $1.12 billion from the International Bank for Reconstruction and Development (IBRD). These undisbursed loans consist of approved loans that have not yet been signed, as well as signed loan commitments.
The IBRD and the IDA are the two arms of the World Bank, with the IBRD lending to middle-income and creditworthy low-income countries, while the IDA provides concessionary loans and grants to the poorest nations. These loans have been extended to Nigeria over the years.
The PUNCH previously reported that the existence of undisbursed loans could potentially increase Nigeria’s debt owed to the World Bank from $12.72 billion to $21.15 billion, marking a 66.27% increase. The World Bank’s audited financial statements for the fiscal year 2022 revealed that as of June 30, 2022, about $8.12 billion had not been disbursed to Nigeria.
The bank explained that these loans are not disbursed until certain actions and document submissions are completed by the borrowers and/or guarantors. As of March 31, 2023, Nigeria’s total debt owed to the World Bank, as per the Debt Management Office, stood at $14.33 billion. This comprises a $13.84 billion IDA loan and a $488.35 million loan, according to the DMO’s external debt report.
The Federal Government recently announced its intention to stop borrowing from both local and foreign sources due to the removal of fuel subsidies and exchange rate harmonization. However, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, clarified that the government would proceed with the loan requirement approved in the 2023 budget. The government’s focus is shifting toward borrowing solely for capital expenditure, as opposed to recurrent expenditure.