NEWS
Nigeria Retains Position as World Bank’s Third-Largest IDA Borrower Despite Slight Debt Decline
Nigeria has maintained its position as the world’s third-largest borrower from the International Development Association (IDA), the concessional lending arm of the World Bank, even as the country recorded a slight reduction in its debt exposure during the first quarter of 2026.
Fresh figures contained in the IDA’s March 2026 financial statements showed that Nigeria’s exposure stood at $18.5 billion as of March 31, 2026, representing a marginal decline from the $18.7 billion recorded at the end of December 2025.
The reduction of about $200 million translates to a 1.1 per cent drop within three months.
However, despite the quarter-on-quarter decline, Nigeria’s debt exposure has continued to rise significantly over the longer term.
On a year-on-year basis, the country’s debt profile increased by $1.2 billion, representing a 6.9 per cent rise from the $17.3 billion recorded in March 2025. The development further highlights Nigeria’s growing dependence on concessional financing to support key development projects, economic reforms, and infrastructure expansion.
According to the report, Nigeria currently ranks behind Bangladesh and Pakistan among countries with the highest IDA borrowing exposure globally.
Bangladesh retained its position as the largest borrower with an exposure of $22.7 billion, while Pakistan followed closely with $19.2 billion. Nigeria occupied the third position with $18.5 billion.
Other African nations listed among the largest borrowers include Ethiopia with $14.4 billion, Tanzania with $14.3 billion, and Kenya with $13.2 billion in outstanding exposure.
The report further revealed that the IDA’s total loans outstanding stood at $230.8 billion as of March 31, 2026, slightly below the $231.1 billion recorded at the end of December 2025, indicating a mild moderation in the institution’s overall lending portfolio.
According to the IDA, loans classified under non-accrual status represented only 0.4 per cent of the total portfolio, while provisions for potential loan losses amounted to $6.3 billion, equivalent to approximately 2.0 per cent of underlying exposures.
Nigeria’s debt exposure alone accounted for roughly eight per cent of the IDA’s entire loan portfolio and about 13.3 per cent of the combined exposure represented by the institution’s ten largest borrowing countries.
The World Bank’s concessional lending institution also disclosed that its ten largest country exposures collectively accounted for nearly 60 per cent of total portfolio exposure as of March 2026, underscoring the concentration of lending among a relatively small group of developing economies.
Further analysis of the report showed that Nigeria was not alone in recording a sharp increase in debt exposure over the past year.
Ethiopia’s exposure rose from $13.2 billion in March 2025 to $14.4 billion in March 2026, while Tanzania’s debt exposure increased from $12.6 billion to $14.3 billion within the same period.
Similarly, Bangladesh’s exposure climbed from $21.2 billion to $22.7 billion, while Pakistan’s rose from $18.3 billion to $19.2 billion. Ghana also witnessed an increase from $7.1 billion to $7.4 billion.
Nigeria’s continued presence among the top borrowers reflects the enormous financing demands associated with infrastructure development, social investment programmes, economic reforms, and public sector restructuring under the World Bank’s concessional financing framework.
Meanwhile, the Federal Government is reportedly in talks with the World Bank for additional financing support aimed at boosting critical sectors of the economy.
It is reported that Nigeria is currently seeking a fresh $1.25 billion World Bank facility targeted at expanding access to finance, improving digital services, strengthening electricity supply, and supporting reforms in tax administration, agriculture, and trade.
If approved, the proposed facility would increase total World Bank loan approvals secured under the administration of President Bola Ahmed Tinubu since June 2023 to about $10.6 billion.
The planned loan is also expected to rank among the largest World Bank facilities approved for Nigeria in recent years, coming after the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
Despite the government’s argument that the loans are necessary to stabilize the economy and fund critical development projects, concerns continue to mount among financial experts and economic analysts over Nigeria’s rising debt burden.
Experts have repeatedly warned against the increasing dependence on multilateral borrowing, especially as Nigeria’s total debt profile reportedly rose to N₦159 trillion as of 2025.
A finance expert and senior partner at SPM Professionals, Dr. Paul Alaje, recently cautioned that the nation’s growing debt stock would ultimately become a burden borne by both present and future generations of Nigerians.
“So here is the point, as the volume increases, Nigeria has to pay more, mind you the debt they gave to us is not this year, but as of December 31 2025.
“So by the time we look at the one that we have retired and the new loans that have been approved and some that have been collected this year, it is clear that by the time the DMO is reporting that in the first quarter 2026, we would have crossed $160 billion.
“So it’s more of a burden on the economy. Whether we have the capacity to pay or not is a different kettle of fish,” he added.