Nigeria’s debt to the International Development Association (IDA), the World Bank’s concessional lending arm, reached $18.7 billion as of December 31, 2025, up $1.9 billion from 2024, according to the IDA’s latest report. This 11.3% increase underscores the country’s growing dependence on multilateral financing amid tightening fiscal space and global market volatility.

Nigeria is now the third-largest borrower in the IDA portfolio, behind Bangladesh ($23bn) and Pakistan ($19.4bn), among the top ten countries with the highest exposures. The increase reflects ongoing project disbursements under Nigeria’s Country Partnership Frameworks, focusing on key sectors such as health, education, and infrastructure.

While IDA loans offer concessional terms with long maturities and grace periods, the rising stock contributes to Nigeria’s external debt obligations. IDA highlights the need to monitor exposures relative to repayment schedules, disbursement patterns, and projected new loans. Its overall portfolio grew to $226.4bn in 2025 from $205.8bn in 2024, reflecting expanded concessional resources through hybrid financing combining member contributions and market borrowings.

As of June 30, 2025, Nigeria’s external debt totaled $46.98bn, with the World Bank Group accounting for $19.39bn, or 41.3% of total debt, demonstrating its significant role in funding development programs.

Economists warn that while foreign borrowing allows critical investments, debt sustainability is crucial. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stressed that borrowing must align with Nigeria’s revenue capacity and development priorities. Excessive reliance on foreign loans can strain reserves, weaken the exchange rate, and increase fiscal vulnerability.

With IDA debt rising steadily, Nigeria must balance the need for development financing with prudent debt management to avoid long-term fiscal challenges and ensure projects enhance the economy’s capacity to repay.