Nigeria has surpassed Vietnam on the World Bank’s list of chronic debtors.
Nigeria has risen to the World Bank’s list of the top ten International Development Association (IDA) borrowers.
The World Bank’s newly released audited report for Fiscal Year 2022, known as the IDA financial statement, revealed that Nigeria is fourth on the list with $13 billion in debt.
Nigeria was ranked fifth on the list as of June 30, 2021, with $11.7 billion in IDA debt stock.
This demonstrates that Nigeria accumulated almost $1.3 billion in IDA debt in a fiscal year, surpassing Vietnam to become the fourth largest debtor.
This debt is distinct from the $486 million loan from the World Bank’s International Bank for Reconstruction and Development.
Except for Nigeria, the top five nations on the list cut their IDA debt stock marginally.
India, which remains first on the list, cut its IDA debt stock from $22 billion in the previous fiscal year to $19.7 billion, followed by Bangladesh, which reduced its IDA debt stock from $18.1 billion to $18 billion.
It is followed by Pakistan, which reduced its debt from $16.4 billion to $15.8 billion, and Vietnam, which dropped to fifth place from $14.1 billion to $12.9 billion.
Nigeria has the greatest IDA debt in Africa, as the top three IDA borrowers are Asian (India, Bangladesh, and Pakistan). The World Bank recently revealed that Nigeria’s debt, while now considered sustainable, is susceptible and costly.
“Nigeria’s debt remains manageable, but susceptible and costly,” the bank added, citing “huge and increasing financing from the Central Bank of Nigeria.”
However, the Washington-based global banking organization noted that, in the event of macro-fiscal shocks, the country’s debt could become unsustainable.
The bank also raised concern over the nation’s debt servicing costs, which it claimed interrupted public expenditures and key service delivery spending.