The IDA, the concessional lending arm of the World Bank, provides low-interest or interest-free loans and grants to the world’s poorest countries. While its loans come with long maturities and grace periods, the steady rise in Nigeria’s debt stock underscores both the depth of its development financing needs and its growing dependence on concessional borrowing.
Global Ranking and Comparative Figures
Nigeria first climbed to third place in 2024, overtaking India, and has now retained this ranking into 2025. Only Bangladesh and Pakistan have higher IDA exposures.
- Bangladesh: $22.6bn (up from $20.5bn in 2024)
- Pakistan: $19.3bn (up from $17.9bn in 2024)
- Nigeria: $18.2bn (up from $16.5bn in 2024)
- India: $14.2bn (down from $15.9bn in 2024)
- Ethiopia: $14.0bn (up from $12.2bn in 2024)
Other countries in the top 10 include Tanzania ($13.7bn), Kenya ($13.0bn), Vietnam ($11.6bn), Ghana ($7.2bn), and Côte d’Ivoire ($6.2bn). Collectively, the top 10 borrowers accounted for 61% of IDA’s total exposure in 2025, slightly down from 63% in 2024.
Nigeria’s Borrowing Pattern
Between June 2023 and June 2025, Nigeria received $3.9bn in new IDA loans, including $2.2bn disbursed in FY2024 alone under the administration of President Bola Tinubu. These concessional inflows have been targeted at infrastructure, energy access, healthcare, rural development, and governance reforms.
In addition, World Bank data shows that Nigeria secured $8.4bn in fresh loans from June 2023 to August 2025 across 15 projects. Of this, $6.5bn came from the IDA while $1.95bn came from the International Bank for Reconstruction and Development (IBRD) — the non-concessional arm of the Bank.
As of March 2025, Nigeria’s total exposure to the World Bank Group stood at $18.23bn, making up nearly 40% of the country’s $45.98bn external debt stock and over 81% of its multilateral debt portfolio.
Debt Sustainability Concerns
Economists warn that while IDA loans are cheaper than market borrowings, the rising balances still add pressure to Nigeria’s already fragile debt profile. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, noted that deficit financing is a normal feature of public budgets but cautioned that sustainability is the real test.
“The key issue is not borrowing itself but whether the economy has the revenue capacity to service obligations,” Yusuf said. “If projects financed with loans do not directly support growth and revenue generation, the country risks entering a cycle of borrowing to repay existing debts.”
He also highlighted the risks of excessive external borrowing, particularly with Nigeria’s volatile exchange rate. “Domestic borrowing is generally easier to manage. Foreign loans, while cheaper in interest terms, can quickly become a burden if currency depreciation worsens repayment costs.”
The Road Ahead
Nigeria’s reliance on concessional loans reflects a persistent gap in funding for critical development sectors. The government argues that these resources are essential to bridge infrastructure deficits, expand energy access, and support poverty reduction.
However, with its obligations to the World Bank steadily rising, Nigeria faces a delicate balancing act: leveraging concessional finance for growth while ensuring that its overall debt trajectory remains sustainable.