By Favour Pius
Nigeria has retained its position as the third-largest borrower from the International Development Association (IDA) of the World Bank despite a marginal decline in its debt exposure to the institution.
Latest figures released by the World Bank showed that Nigeria’s outstanding obligations to the IDA dropped slightly amid ongoing efforts by the Federal Government to manage rising debt levels and improve fiscal sustainability.
The IDA, the concessional lending arm of the World Bank, provides low-interest loans and grants to low-income countries for critical infrastructure, social development and poverty reduction programmes.
Despite the decline, Nigeria remained among the top three countries with the highest exposure to the institution, reflecting the country’s continued dependence on multilateral funding to support economic reforms, infrastructure development and public sector financing.
Analysts said the slight reduction in debt may signal improved repayment efforts and a gradual slowdown in fresh borrowings from the multilateral lender, although concerns persist over the country’s overall debt profile and rising debt servicing costs.
Nigeria has in recent years increased its reliance on concessional loans from multilateral institutions such as the World Bank due to their relatively lower interest rates and longer repayment periods compared to commercial borrowing.
Economic experts, however, warned that while concessional loans offer temporary fiscal relief, sustained borrowing without corresponding revenue growth could worsen pressure on public finances.
The Federal Government has repeatedly defended its borrowing strategy, insisting that loans obtained from multilateral institutions are tied to critical sectors including infrastructure, healthcare, agriculture, education and social investment programmes aimed at stimulating economic growth.
Recent reforms by the government, including subsidy removal and foreign exchange liberalisation, are also expected to improve fiscal conditions and reduce dependence on external borrowing over the medium term.
