Nigeria’s World Bank debt rises to $17.81bn in 2024 on sectoral loans

Nigeria’s total debt to the World Bank rose by $2.36 billion in 2024, reaching $17.81 billion by year-end — a 15.3% increase from $15.45 billion in 2023.

This sharp rise was driven by six newly approved loans targeting critical sectors such as healthcare, infrastructure, governance, and fiscal reform.

Data from the Debt Management Office (DMO) revealed that debt to the International Development Association (IDA) climbed from $14.96 billion to $16.56 billion, while obligations to the International Bank for Reconstruction and Development (IBRD) more than doubled from $485.54 million to $1.24 billion.

This marks Nigeria’s steepest annual growth in World Bank debt in recent years, further cementing the Bretton Woods institution’s role as the country’s largest multilateral creditor.

According to World Bank records, Nigeria secured $4.25 billion in loan approvals in 2024, though only $2.36 billion was disbursed during the year. The remainder will be released in phases over subsequent years.

The biggest facility was the $1.5 billion Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing (DPF), approved in June 2024, designed to support macroeconomic reforms, expand fiscal space, and cushion vulnerable populations.

Also approved that month was the NG Accelerating Resource Mobilization Reforms Program-for-Results (PforR), a $750 million package focused on enhancing non-oil revenue collection and protecting oil and gas revenue streams.

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Three additional $500 million loans were greenlit in September and December for key development initiatives:

Another $500 million loan was approved for the Sustainable Power and Irrigation for Nigeria Project, targeting dam safety, irrigation, and water management for energy and agricultural productivity.

By December 2024, Nigeria’s total external debt reached $45.78 billion, with the World Bank accounting for 38.9% of the total — up from 36.4% in 2023. Within the multilateral debt category (totaling $22.32 billion), the World Bank’s share now stands at 79.8%, compared to 73.1% the previous year.

This deepening reliance reflects Nigeria’s strategic pivot toward concessional, programmatic financing over commercial borrowing, especially for structural reforms and development programs.

While World Bank loans typically come with favorable interest rates and long repayment terms, Nigeria’s growing debt burden has reignited debates around debt sustainability, especially in the context of:

Analysts have urged the Federal Government to maintain strict fiscal discipline, enhance transparency, and ensure that loan-backed programs deliver measurable impact. Without clear results and prudent financial management, rising debt levels could weigh heavily on future budgets and economic stability.

The government’s continued borrowing from multilateral partners like the World Bank underscores its effort to pursue reforms under tighter fiscal conditions, but the long-term effectiveness will depend on efficient execution and accountability mechanisms.