Nigeria’s Loan At An Alarming Rate Says World Bank
World Bank has listed Nigeria and nine other countries as nations with high-debt risk exposure.
In a financial statement for the International Development Association (IDA) released on Monday, August 10; the World Bank pegged Nigeria at number five with a $11.7b IDA debt stock.
“As of June 30, 2021, the ten countries with the highest exposures accounted for 66% of IDA’s total exposure,” it explained in the document.
“IDA’s largest exposure to a single borrowing country, India, was $22 billion as of June 30, 2021. 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.”
India tops the list with an IDA debt stock of $22b. Bangladesh – with $18.1b – is second and followed by Pakistan ($16.4b), and Vietnam with $14.1b, according to the World Bank document.
Ethiopia, Kenya, Tanzania, Ghana, and Uganda complete the top 10 list in that order.
“IDA faces two types of credit risk: country credit risk and counterparty credit risk,” the World Bank further explained.
“Country credit risk is the risk of loss due to a country not meeting its contractual obligations; and counterparty credit risk is the risk of loss attributable to a counterparty not honoring its contractual obligations. IDA is exposed to commercial as well as noncommercial counterparty credit risk.”
As of September 2020, Nigeria had taken a $31.98b worth of loans from the World Bank Group, International Monetary Fund (IMF), African Development Bank (AfDB), according to the Debt Management Office (DMO).
