Nigeria’s debt to the World Bank’s concessional lending arm, the International Development Association, surged by $1.9bn within one year to reach $18.7bn as of December 31, 2025.
New financial data released by the institution showed that Nigeria’s exposure rose from $16.8bn at the end of 2024, representing an 11.3 per cent year-on-year increase.
The development highlights the Federal Government’s growing reliance on multilateral concessional financing as it navigates tightening fiscal space and global market volatility.
The latest figures place Nigeria as the third-largest borrower in the IDA portfolio, behind Bangladesh with $23.0bn and Pakistan with $19.4bn among the top 10 countries with the highest exposures.
According to the IDA Management’s Discussion and Analysis for the period ended December 31, 2025, the 10 largest borrowers accounted for 60 per cent of the institution’s total exposure as of the reporting date. A year earlier, the same group represented 61 per cent.
Findings show that the $1.9bn increase largely reflects continued project disbursements under Nigeria’s Country Partnership Frameworks and expanded commitments in critical sectors such as health, education and infrastructure.
While IDA loans are highly concessional, offering long maturities and grace periods, the rising exposure adds to Nigeria’s external debt stock.
In its report, IDA emphasised the need to monitor exposures in relation to repayment and future disbursement profiles.
“Monitoring these exposures relative to the SBL requires consideration of the repayment profiles of existing loans, as well as disbursement profiles and projected new loans and guarantees,” the institution stated.
The surge also coincided with an expansion in IDA’s overall portfolio. Net loans outstanding increased to $226.4bn as of December 31, 2025, from $205.8bn a year earlier.
IDA, a member of the World Bank Group, provides loans, grants and guarantees to the poorest and most vulnerable countries.
Aside from IDA, the World Bank Group also operates the International Bank for Reconstruction and Development, which lends to middle-income and creditworthy lower-income countries through market-based financing backed by its AAA rating.
As of June 30, 2025, Nigeria’s external debt stood at $46.98bn, according to data from the Debt Management Office.
Out of this amount, the World Bank Group accounted for $19.39bn, comprising $18.04bn from IDA and $1.35bn from the International Bank for Reconstruction and Development. This represents 41.3 per cent of Nigeria’s total external debt.
Economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said the rising World Bank commitments should be examined within the framework of Nigeria’s Medium-Term Expenditure Framework and annual budgets.
He noted that deficit financing is common globally and can support critical investments when managed prudently.
However, Yusuf stressed that borrowing must be guided by sound economic reasoning and clear development priorities.
He warned that debt sustainability depends largely on Nigeria’s revenue capacity to service its obligations. Without adequate cash flow, he cautioned, the country risks borrowing to repay existing loans, deepening fiscal vulnerability.
According to him, projects funded through loans should strengthen the economy’s repayment capacity. He also advised caution on foreign borrowing due to exchange-rate risks, noting that excessive external debt could pressure foreign reserves and weaken the naira.
Analysts say maintaining a disciplined approach to debt management will be critical to avoiding long-term fiscal distress as Nigeria’s exposure to concessional financing continues to grow.
