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By Chuka Madu

Nigeria’s financial obligations to the World Bank recorded a significant rise in 2025, increasing by $2.08 billion within a year as the country continues to lean heavily on external borrowing to support its fiscal and development needs.

Fresh figures released by the Debt Management Office (DMO) show that Nigeria’s total exposure to the World Bank stood at $19.89 billion as of 31 December 2025, up from $17.81 billion recorded at the end of the previous year. This represents an 11.7 per cent increase year-on-year.

The data points to sustained government reliance on multilateral financial institutions as a key source of funding amid ongoing revenue challenges and widening fiscal gaps.

A major share of the debt remains concentrated within the International Development Association (IDA), the World Bank’s arm that provides low-interest loans and grants to low-income countries. Nigeria’s obligations under the IDA rose sharply by $1.94 billion within the review period, climbing from $16.56 billion to $18.51 billion.

This indicates that most of the country’s new borrowing from the World Bank continues to come through concessional arrangements, which offer softer repayment terms compared to commercial loans.

Borrowing from the International Bank for Reconstruction and Development (IBRD), which typically serves middle-income economies, also saw an increase. Nigeria’s exposure under this window rose from $1.24 billion in 2024 to $1.38 billion in 2025.

Despite the rise in absolute debt figures, the World Bank’s proportion of Nigeria’s total external debt portfolio declined marginally to 38.36 per cent, compared to 38.90 per cent the previous year. Financial analysts attribute this slight drop to a faster build-up in other debt categories, especially commercial borrowings.

Overall, Nigeria’s external debt stock increased significantly, rising by $6.08 billion within the year to reach $51.86 billion. The World Bank remains the country’s largest single external creditor, accounting for a substantial portion of this growth.

Further breakdown of the debt profile shows that Eurobond obligations also rose, increasing from $17.32 billion to $18.55 billion. Multilateral debt, which includes loans from international financial institutions, climbed from $22.32 billion to $23.85 billion.

In addition, bilateral debt—loans obtained from other sovereign governments—rose from $6.09 billion to $6.72 billion over the same period.

The overall trend highlights Nigeria’s continued dependence on a mix of concessional, commercial and bilateral financing sources to meet budgetary needs and fund infrastructure and development projects.

Economists note that the strong presence of World Bank lending reflects both limited access to cheaper domestic funding and the appeal of concessional loans, which typically come with lower interest rates and longer repayment periods.

However, financial experts have repeatedly raised concerns about the long-term implications of rising debt levels. While concessional loans ease immediate fiscal pressure, they warn that sustained borrowing without corresponding revenue growth could strain public finances in the future.

They argue that improving domestic revenue generation, reducing leakages, and strengthening fiscal discipline remain critical if Nigeria is to manage its growing debt exposure more sustainably.

For now, the upward trajectory of external borrowing underscores the country’s continued reliance on international lenders at a time of tight fiscal space and expanding development demands.