Nigeria’s debt to the World Bank’s concessional lending arm, the International Development Association (IDA), surged by $1.9 billion in one year, reaching $18.7 billion as of December 31, 2025, according to new financial data from the institution.
The IDA Management’s Discussion and Analysis report for the period showed that Nigeria’s exposure rose from $16.8 billion at the end of 2024, marking an 11.3 per cent year-on-year increase. The rise reflects growing reliance on multilateral concessional financing as the Federal Government navigates tightening fiscal space amid global market volatility.
The latest figures place Nigeria as the third-largest borrower in the IDA portfolio, behind Bangladesh ($23.0 billion) and Pakistan ($19.4 billion), among the top ten countries with the highest exposures. These top ten countries accounted for 60 per cent of IDA’s total portfolio as of December 31, 2025.
The $1.9 billion increase largely reflects continued project disbursements under Nigeria’s Country Partnership Frameworks and expanded commitments in sectors such as health, education, and infrastructure. While IDA financing is highly concessional, with long maturities and grace periods, the growing stock adds to Nigeria’s external debt obligations.
IDA emphasised the need to monitor such exposures, taking into account repayment schedules, disbursement profiles, and future loan commitments. The institution’s overall portfolio rose to $226.4 billion as of December 31, 2025, up from $205.8 billion a year earlier, reflecting a broader scaling up of concessional resources under its hybrid financing model.
Aside from the IDA, Nigeria also borrows from the International Bank for Reconstruction and Development (IBRD), another arm of the World Bank that provides sovereign loans, guarantees, and advisory support for middle-income and creditworthy lower-income countries.
As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, with the World Bank Group accounting for $19.39 billion—comprising $18.04 billion from IDA and $1.35 billion from IBRD. This means the World Bank holds 41.3 per cent of Nigeria’s external debt, underscoring its critical role in funding development programmes.
Economist Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said Nigeria’s rising World Bank commitments should be assessed within the context of the country’s Medium-Term Expenditure Framework and annual budgets. He stressed that borrowing should be guided by sound economic reasoning and development priorities, and highlighted that debt sustainability depends on the country’s revenue capacity to service its obligations.
Dr. Yusuf warned that without strong cash flow, Nigeria risks borrowing to service existing loans, perpetuating fiscal vulnerability. He also noted the exchange-rate risks posed by foreign loans and urged that projects funded by loans must enhance the economy’s capacity to repay.
