Nigeria’s financial obligations to the World Bank have grown significantly, rising by $2.08 billion within a year to reach $19.89 billion as of December 31, 2025, according to an analysis of external debt data from the Debt Management Office (DMO).
The figure reflects an 11.7% increase from the $17.81 billion recorded at the end of 2024, underscoring the country’s continued reliance on multilateral financing amid persistent fiscal constraints.
The World Bank exposure is made up of loans from the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD). While IDA offers concessional financing to low-income countries, IBRD provides lending and policy support to creditworthy developing economies.
IDA and IBRD Drive Overall Increase
Breakdown of the data shows that IDA loans accounted for the bulk of the increase, rising from $16.56 billion in 2024 to $18.51 billion in 2025—an increase of $1.94 billion or 11.73%.
IBRD exposure also recorded growth, climbing from $1.24 billion to $1.38 billion, representing an increase of $141.84 million or 11.41%.
Together, these components pushed Nigeria’s World Bank debt to nearly $20 billion, maintaining the institution’s position as the country’s largest single external creditor group.
World Bank Share Slightly Declines as Other Debts Rise Faster
Despite the increase, the World Bank’s share of Nigeria’s total external debt stock slightly declined to 38.36% in 2025, down from 38.90% in 2024. This occurred as other borrowing categories expanded more rapidly.
Nigeria’s total external debt rose by $6.08 billion within the same period, increasing from $45.78 billion to $51.86 billion—an overall jump of 13.27%.
Economists note that while World Bank lending contributed about 34.3% of the total debt increase, faster growth in commercial and syndicated project loans played a larger role in driving overall external debt expansion.
Eurobond obligations also rose from $17.32 billion to $18.55 billion, reflecting continued access to international capital markets despite tightening global financial conditions.
Borrowing Mix Still Heavily Weighted Toward Multilateral Loans
The data show that multilateral debt rose from $22.32 billion to $23.85 billion, while bilateral debt increased from $6.09 billion to $6.72 billion.
Nigeria’s borrowing profile remains heavily skewed toward concessional lenders, with the World Bank accounting for more than 80% of multilateral exposure.
This structure reflects ongoing fiscal pressure, limited domestic revenue capacity, and the government’s preference for cheaper, longer-tenor financing options amid elevated debt servicing costs.
Experts Warn on Sustainability, Defend Concessional Borrowing
Reacting to the trend, Lagos-based economist Adewale Abimbola said multilateral loans remain relatively favourable due to their concessional nature.
“If it’s concessionary and tied to viable projects with medium-term revenue prospects, I don’t think it’s a bad idea,” he said. “Borrowing isn’t bad; what matters is utilisation.”
However, development economist Dr. Aliyu Ilias expressed concern over Nigeria’s rising debt stock, questioning the sustainability of continued borrowing even amid claims of improved government revenue.
He argued that increasing debt service obligations are already affecting capital expenditure and reducing the quality of public service delivery.
“The impact of the current borrowing spree is being felt in reduced public service delivery,” he noted, warning that debt servicing is consuming a growing share of government revenue.
Balancing Growth Ambitions With Debt Risks
While concessional loans from institutions like the World Bank remain a key financing tool for infrastructure and development projects, analysts continue to stress the need for stronger revenue generation and tighter fiscal discipline.
As Nigeria’s external debt crosses $51 billion, the challenge, according to experts, lies in ensuring that borrowed funds translate into measurable economic growth rather than long-term fiscal strain.