World Bank becomes Nigeria’s single largest creditor as loan increases

The loan portfolio of The World Bank under the President Muhammadu Buhari-led administration has increased by 29.98 percent, a Debt Management Office (DMO) statistics showed.

According to the DMO statistic, World Bank’s credit facility to Nigeria peaked at $8.67 billion in 2018, increasing from $6.67 billion in 2016. This makes the World Bank Nigeria’s single largest creditor, even as the Breton Woods Institution holds 34.32 percent of the nation’s external debt commitment.

Nigeria’s external debt as of December 31, 2018, stood at $25.27 billion.

The World Bank’s loan to Nigeria is disbursed through two arms of the bank: International Development Association and International Bank for Reconstruction and Development.

World Bank‘s IDA grants low-interest loans to developing countries while the IBRD is the commercial arm that lends at commercial interest rates.

International Development Association accounts for $8.55 billion of the World Bank portfolio in Nigeria, while the International Bank for Reconstruction and Development makes up $124.18 million of the portfolio.

Nigeria’s capacity to repay N24.39 trillion debt worries IMF; FG replies

Recall that Nairametrics recently reported that Nigeria’s ability to repay its N24.39 trillion debt is in question after the International Monetary Fund (IMF) expressed concern about the rollover risks, arguing Nigeria’s capacity to refinance might drop in the future.

The concern was raised by the Financial Counsellor and Director, Monetary and Capital Markets Department, IMF, Tobias Adrian, while presenting the Global Financial Stability Report at the ongoing joint annual spring meetings with the World Bank in Washington DC.

The Nigerian Government countered IMF statement, saying the nation’s debt burden is sustainable, adding that the debt burden will have no negative impact on Nigeria’s economy.

While reacting to IMF‘s statement, the Minister of Budget and National Planning, Senator Udoma Udo-Udoma said steps are being taken to ensure Nigeria doesn’t have a debt problem. One of the steps is widening of tax collection.

Source: Nairametrics

Share this...

Leave a Reply

Your email address will not be published. Required fields are marked *