Nigeria’s World Bank IDA Debt Rises to $18.7bn as External Borrowing Pressures Mount
Nigeria’s debt to the International Development Association (IDA), the concessional lending arm of the World Bank, climbed to $18.7bn as of December 31, 2025, reflecting a $1.9bn increase within one year. Fresh financial data from the institution show that Nigeria’s exposure rose from $16.8bn at the end of 2024, marking an 11.3 per cent year-on-year growth. The increase underscores the Federal Government’s growing reliance on concessional multilateral funding amid tightening fiscal conditions and global economic uncertainty.
The latest figures position Nigeria as the third-largest borrower in the IDA portfolio, behind Bangladesh with $23.0bn and Pakistan with $19.4bn in exposure. Collectively, the top 10 borrowing countries account for 60 per cent of IDA’s total loan exposure. Analysts say Nigeria’s rising share reflects sustained disbursements tied to development projects in critical sectors such as health, education, and infrastructure under its Country Partnership Frameworks.
Although IDA loans are offered on highly concessional terms — including long repayment periods and grace windows — the growing debt stock adds to Nigeria’s broader external obligations. As of June 30, 2025, Nigeria’s total external debt stood at $46.98bn, according to the Debt Management Office, with the World Bank Group accounting for $19.39bn. This includes $18.04bn from IDA and $1.35bn from the International Bank for Reconstruction and Development (IBRD), reinforcing the World Bank’s dominant role in funding Nigeria’s development programmes.
The IDA report noted that exposure monitoring must factor in repayment timelines, new disbursements, and future guarantees. Meanwhile, the institution’s overall portfolio expanded significantly, with net loans outstanding rising to $226.4bn in 2025 from $205.8bn a year earlier. The growth reflects expanded concessional financing under its hybrid funding model, which blends donor contributions with market borrowings to support vulnerable economies.
Commenting on the trend, Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said borrowing is not inherently problematic, as deficit financing is common globally. However, he warned that sustainability hinges on Nigeria’s revenue capacity and prudent project selection. According to him, foreign loans carry exchange-rate risks that could strain reserves and weaken the naira if not carefully managed. Without disciplined fiscal planning and revenue growth, he cautioned, Nigeria risks falling into a cycle of borrowing to service existing debts, heightening long-term fiscal vulnerability.
source: punch