Nigeria, others hold 30% of IDA-eligible countries’ debt – World Bank

The World Bank has revealed that Nigeria, Bangladesh, and Pakistan together account for nearly 30% of the total external debt owed by countries eligible for International Development Association (IDA) support.

This was highlighted in the bank’s International Debt Report for 2025, released on Wednesday.

The report sheds light on a significant rise in net debt inflows, shifting trends in short-term borrowing, and a growing reliance on multilateral lenders, particularly the World Bank.

Growing Concerns Over Nigeria’s Public Debt

As of the second quarter of 2025, Nigeria’s total public debt reached N152.39 trillion, a rise from N149.38 trillion in the previous quarter. The country’s external debt stood at $46.98 billion (N71.85 trillion) in June 2025, up from $45.98 billion (N70.63 trillion) in March 2025. Additionally, Nigeria’s external debt service payments rose to $932.1 million in Q2 2025.

According to the report, Nigeria’s public debt is approaching critical levels, with experts warning that the country’s debt could soon become unsustainable.

The report also notes that the structure of long-term external debt among IDA-eligible nations has remained largely unchanged over the past decade. Public and publicly guaranteed (PPG) debt continues to account for 75% of the total debt, while private non-guaranteed (PNG) debt makes up the remaining 25%.

In 2024, PPG debt among these countries increased by 2.8% to reach $816.5 billion, while PNG debt saw a slight decline, dropping to $241.9 billion.

Debt concentration has become more prominent, with just seven countries among the top ten borrowers holding more than half of the total external debt owed by IDA-eligible countries. The top ten borrowers in 2024 included China; India; Brazil; Mexico;     Türkiye; Indonesia; Argentina; Colombia; Ukraine and Thailand.

The report revealed that total net debt inflows to IDA-eligible countries surged by 18.6% to $53.1 billion in 2024.

The increase was mainly driven by a dramatic reversal in short-term debt flows, which swung from an outflow of $10.6 billion in 2023 to an inflow of $5.6 billion in 2024.

While long-term debt inflows fell by 14.4%, they still amounted to $47.4 billion, higher than in 2022. The report also noted a shift in long-term debt flows for PNG borrowers, which turned negative, from an inflow of $7.3 billion to an outflow of $567 million. This shift is partly attributed to a downturn in commercial bank lending and private creditors, marking the first time since 1999 that net flows from these sources turned negative.

With Nigeria among the top three largest IDA-eligible borrowers, the growing concentration of debt raises concerns about its fiscal sustainability, ability to service external obligations, and vulnerability to global financial shocks. The report emphasizes the need for enhanced debt transparency, more prudent borrowing practices, and improved domestic resource mobilization in countries with high debt exposure.

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