Nigeria’s World Bank IDA Debt Climbs to $18.7bn, Now Third-Largest Borrower
Nigeria’s debt to the International Development Association (IDA) — the concessional lending arm of the World Bank — has surged by about $1.9 billion over the past year, bringing the total to $18.7 billion as of December 31, 2025, new data show.
The latest figures mark an 11.3 per cent year-on-year increase from the roughly $16.8 billion owed at the end of 2024, reflecting continued reliance on multilateral concessional financing to support Nigeria’s development agenda amid tightening fiscal space and global economic pressures.
The jump in IDA exposure has elevated Nigeria to the third-largest borrower from the association, behind Bangladesh ($23 billion) and Pakistan ($19.4 billion), among the top ten countries with the highest IDA debt stocks. Analysts say the increase mostly stems from ongoing project disbursements under Nigeria’s Country Partnership Frameworks, with expanded commitments in priority sectors such as infrastructure, health, and education.
What This Means for Nigeria’s Economy
• Concessional Terms, But Added Obligations: IDA loans typically have low interest rates, long maturities, and grace periods, making them more favourable than commercial borrowing. However, the rising stock still adds to Nigeria’s external debt obligations and must be monitored closely in the context of repayment profiles and future borrowing plans.
• Growing Dependence on External Financing: The increase highlights Nigeria’s continued dependence on external concessional funds to bridge fiscal gaps and implement development programmes. Economic experts have cautioned that borrowing should align with revenue-generation capacity to prevent unsustainable debt dynamics.
• Debt Sustainability Concerns: While IDA financing can support long-term growth, a heavy debt burden — especially if economic growth slows or revenue falters — could strain public finances. Business and economic groups have previously warned that escalating external debt might heighten pressures to service obligations, potentially crowding out critical public investments.
Nigeria’s broader external debt includes other multilateral, bilateral, and commercial creditors, and continues to evolve with each government budget cycle and financing engagement. Observers say prudent debt management, stronger domestic revenue mobilisation and disciplined allocation of borrowed funds are crucial to balancing development needs with fiscal stability.
