Nigeria is ranked fifth single borrowing country with the highest debt risk exposure across the world, the World Bank has said.
The bank disclosed this in the fiscal year 2021 (FY21) financial statement for International Development Association (IDA).
The IDA is the bank’s financial institution that offers concessional loans and grants to the poorest developing countries.
The top ten developing countries with high debt risk exposure, according to the report are: India with $22 billion; Bangladesh, $18.1 billion; Pakistan, $16.4 billion; Vietnam, $14.1 billion; Nigeria, $11.7 billion.
Others are Ethiopia, $11.2 billion; Kenya, $10.2 billion; Tanzania, $8.3 billion; Ghana, $5.6 billion; and Uganda, $4.4 billion.
“For FY22, the single borrower limit (SBL) has been set at $45 billion (25 percent of $180.9 billion of equity as of June 30, 2021), marginally higher than FY21,” the statement said.
“As of June 30, 2021, the ten countries with the highest exposures accounted for 66% of IDA’s total exposure.
“Monitoring these exposures relative to the SBL requires consideration of the repayment profiles of existing loans, as well as disbursement profiles and projected new loans and guarantees.”
The statement said a total of $19.54 billion loan has been agreed to be disbursed to Nigeria. It also said out of the $19.54 billion include $1.46 billion loan approved but not yet signed, $6.61 billion signed loan commitment, and $11.47 billion outstanding loan.
“We agreed to provide debt relief in return for future compensation from members for forgone reflows, ensuring that IDA’s financial capacity would not be reduced,” the IDA said.
“For a borrower to be eligible for debt relief on its loans with IDA, it is required to maintain macroeconomic stability, carry out key structural and social reforms, and maintain all loans in accrual status.”
In the FY21 statement of the International Bank for Reconstruction and Development (IBRD), a World Bank’s institution, a total of $1 billion loan has been agreed with Nigeria.
