Nigeria's outstanding debt to the International Development Association (IDA), the World Bank's concessional lending arm for low-income countries, has climbed to $18.7 billion as of the end of 2025.
This marks a sharp $1.9 billion increase or 11.3% year-on-year, from $16.8 billion recorded at the close of 2024.According to the IDA's latest Management’s Discussion and Analysis, the rise positions Nigeria as the third-largest borrower in the institution's concessional portfolio. Bangladesh leads with $23.0 billion, followed by Pakistan at $19.4 billion.
The top ten borrowers collectively account for approximately 60% of IDA's total exposure.The surge reflects Nigeria's increased reliance on multilateral financing to support infrastructure, poverty reduction, and economic reforms amid domestic fiscal challenges, including revenue shortfalls and rising debt service obligations. IDA loans remain highly concessional, featuring low or zero interest rates and extended repayment periods of up to 38–40 years, making them more sustainable than commercial borrowing.
However, analysts have raised concerns about long-term debt sustainability. Nigeria's broader external debt stood at around $47 billion as of mid-2025, with the World Bank Group (including IDA and some IBRD portions) holding a substantial share. The accumulation of even concessional debt adds to external vulnerabilities, particularly in a volatile global environment marked by currency fluctuations and commodity price swings.
The World Bank's overall IDA portfolio expanded significantly, with net loans outstanding reaching $226.4 billion by December 31, 2025, up from $205.8 billion a year earlier. This growth aligns with efforts to scale up support for developing nations through hybrid financing models that blend donor contributions with market borrowings.
Experts note that while these funds have financed key projects in health, education, agriculture, and power, the priority remains ensuring borrowed resources translate into measurable economic gains and improved revenue generation to ease future repayment burdens.
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