In 2024, Nigeria allocated $2.32 billion for debt servicing to the World Bank and IMF, a sharp increase from $998.92 million in 2023. Servicing payments to the IMF reached $1.63 billion, while payments to the World Bank rose to $689.44 million. Nigeria’s total external debt servicing for 2024 amounted to $4.66 billion. The country continues to depend heavily on multilateral creditors as it maneuvers its economic strategies amidst rising debt costs.
In 2024, Nigeria has allocated $2.32 billion for servicing its debt to the World Bank and the International Monetary Fund (IMF). This reflects a substantial increase from the $998.92 million paid in the previous year, as reported by the Debt Management Office. Specifically, Nigeria disbursed $689.44 million to the World Bank, which included $663.23 million to the International Development Association (IDA) and $26.21 million to the International Bank for Reconstruction and Development (IBRD).
The IMF’s debt servicing surged to $1.63 billion, comprising entirely of principal repayments without any recorded interest or additional charges. In contrast, the payments made to the World Bank in 2023 were $597.19 million, while the IMF received $401.73 million. Consequently, the payments to both institutions have escalated by over 134% year-on-year, predominantly due to the heightened repayments to the IMF.
Overall, Nigeria’s external debt servicing in 2024 amounted to $4.66 billion, an increase from $3.5 billion in 2023. Multilateral creditors accounted for $2.62 billion, representing 56% of this total. Notably, the IMF alone constituted 35% of Nigeria’s total external debt servicing in 2024 and 62% of the payments made to multilateral lenders. Payments to commercial creditors decreased to $1.47 billion, while bilateral creditors received $570.67 million, reflecting a decrease in payments to commercial lenders.
The World Bank’s IDA emerged as Nigeria’s major multilateral creditor, with over $663 million being spent on principal and interest repayments in 2024. Although payments to IBRD rose slightly, they were notably influenced by an increase in interest rates. Historically, the combined payments to the IMF and World Bank increased to 49.8% of Nigeria’s external debt servicing in 2024, compared to 27.8% in 2023, highlighting the growing reliance on multilateral support, which is significantly constraining Nigeria’s fiscal capacity.
As reported on by Sunday PUNCH, Nigeria’s total external debt stock reached $45.78 billion as of December 31, 2024, an increase from $42.50 billion in the previous year. This increase is largely due to additional borrowing from the World Bank Group, specifically the IDA and IBRD. By the end of 2023, Nigeria’s debts owed to the World Bank stood at $15.45 billion, which rose to $17.81 billion by the end of 2024.
Furthermore, Nigeria’s debt burden to the IMF witnessed a significant decline from $2.47 billion in 2023 to just $800.23 million in 2024, mainly attributed to repayments on previous emergency and budget-support facilities. Currently, 79.8% of Nigeria’s multilateral debt comprises loans from the World Bank. In terms of the entire external debt profile, the World Bank constitutes nearly 39% of total external debt, indicative of increasing dependence on development financing, especially from concessional loans provided by the IDA.
At a recent Corporate Governance Forum, Nigeria’s Finance Minister Wale Edun discussed strategic shifts in government borrowing, emphasizing a move away from debt-focused strategies to prioritizing equity investments and public-private partnerships. Despite these strategies, Nigeria continues to maintain its borrowing trend, notably from the World Bank, as part of its ongoing reform initiatives.
In summary, Nigeria has incurred $2.32 billion in debt servicing to the World Bank and IMF in 2024, marking a notable increase from the previous year. While the country has seen a significant rise in payments to the IMF, it has simultaneously increased its reliance on the World Bank. The growing external debt and rising debt servicing costs highlight the challenges faced by Nigeria’s economy, amidst efforts to shift strategic borrowing methodologies towards equity and investment partnerships. Nevertheless, Nigeria continues to seek support from multilateral institutions to address ongoing economic reforms and growth.
Original Source: punchng.com
