The undisbursed loans could raise Nigeria’s debt to the World Bank from $12.72 billion to $21.15 billion, the PUNCH has learned.
This shows that undisbursed loans can increase Nigeria’s debt to the lending institution by 66.27%.
The World Bank’s audited financial statements for the financial year 2022 showed that the bank had yet to disburse around $8.12 billion in Nigeria as of June 30, 2022.
A breakdown further showed that undisbursed loans included $7.60 billion from the International Development Association, IDA, and $514 million from the International Bank for Reconstruction and Development, IBRD.
These undisbursed loans include approved but unsigned loans as well as signed loan commitments.
Explaining the reason for the loans not yet disbursed, in particular the signed loan commitments, the bank said that these “loans are not effective and disbursements only start when the borrowers and/or guarantors take certain actions and provide documents. “.
The IBRD and IDA, which make up the World Bank, have over the years advanced loans to Nigeria.
IBRD lends to governments of creditworthy middle-income and low-income countries, while IDA provides concessional loans – called credits – and grants to governments of poorer countries.
The Debt Management Office had revealed that Nigeria’s debt to the Washington-based bank was $12.72 billion as of March 31, 2022.
A breakdown showed that Nigeria borrowed $12.23 billion from IDA and $486.10 million from IBRD.
In an earlier PUNCH report, it was revealed that Nigeria owed the World Bank $13.04 billion as of June 30, 2022.
According to the report, the total debt owed to the World Bank by Nigeria increased by $660 million in the first six months of 2022.
Nigeria’s debt to IDA and IBRD stood at $12.55 billion and $486 million respectively as of June 30, 2022, compared to $11.97 billion and $410.60 million as of December 32, 2021 .
The PUNCH also reported that rising debt propelled Nigeria into the World Bank’s IDA list of top 10 borrowers.
The World Bank’s audited IDA financial statements for fiscal year 2021 showed Nigeria ranked fifth on the list with outstanding IDA debt of $11.7 billion as of June 30, 2021.
However, the World Bank’s recently released FY2022 IDA audited financial statements showed that Nigeria had moved to fourth position on the list, with IDA debt outstanding of $13 billion. dollars as of June 30, 2022.
This shows that Nigeria has accrued about $1.3 billion in IDA debt in one fiscal year, with the country taking Vietnam’s fourth largest debtor position.
This debt differs from the outstanding IBRD loan of $486 million from the World Bank.
The top five countries on the list have slightly reduced their outstanding debt with IDA, with the exception of Nigeria.
Nigeria has the highest IDA debt in Africa, as the top three IDA borrowers (India, Bangladesh and Pakistan) are from Asia.
The World Bank recently revealed that Nigeria’s debt, which could be considered sustainable for now, was vulnerable and costly.
The bank said: “Nigeria’s debt remains sustainable, albeit vulnerable and costly, particularly given the large and growing funding from the Central Bank of Nigeria.”
However, the Washington-based global financial institution added that the country’s debt also risks becoming unsustainable in the event of macro-fiscal shocks.
The bank further expressed concern over the cost of servicing the country’s debt, which it said has disrupted public investment and essential spending on service delivery.
A former Deputy Governor of the Central Bank of Nigeria and former presidential candidate, Kingsley Moghalu, in a recent PUNCH report, criticized the growing trend of government borrowing, urging officials to reconsider other means of generating revenue for the country.