The World Bank has revealed that Nigeria, Bangladesh, and Pakistan now collectively account for almost 30 percent of the total external debt owed by countries eligible for International Development Association (IDA) support.
This was made known in the bank’s International Debt Report 2025 released on Wednesday.
The report paints a picture of rising net debt inflows, shifting short-term borrowing patterns, and increasing reliance on multilateral lenders, particularly the World Bank.
Nairametrics reports that experts have recently raised alarms, warning that Nigeria’s public debt is now approaching dangerously unsustainable levels.
According to the report, the structure of long-term external debt among IDA-eligible countries has remained largely unchanged over the past decade.
The report notes that public and publicly guaranteed (PPG) debt still makes up 75 per cent of the total, with private non-guaranteed (PNG) debt accounting for the remaining 25 per cent.
PPG debt refers to all long-term external obligations owed by a country’s public sector, including any private-sector debt that is backed by a government guarantee. In contrast, PNG debt covers long-term external obligations incurred by private companies or individuals that carry no government guarantee.
In 2024, the report noted, the debt stock of PPG borrowers rose 2.8 per cent to US$816.5 billion, while PNG borrowers saw a slight decline to US$241.9 billion.
Debt concentration, the report stated, has become more pronounced, with just seven countries of the top ten borrowers holding over half of all IDA-eligible external debt.
The top ten borrowers, according to the World Bank, are: China, India, Brazil, Mexico, Türkiye, Indonesia, Argentina, Colombia, Ukraine, and Thailand.
Debt inflows surge, driven by short-term borrowing
According to the report, the total net debt inflows to IDA-eligible countries jumped 18.6 per cent to $53.1 billion in 2024.
This increase was largely due to a dramatic shift in short-term debt flows, which swung from an outflow of $10.6 billion in 2023 to an inflow of $5.6 billion in 2024.
Although long-term debt inflows dropped 14.4 percent, they remained positive at $47.4 billion, still higher than in 2022.
The report notes that long-term flows to PNG borrowers turned negative, moving from an inflow of $7.3 billion to an outflow of $567 million.
This reversal was driven partly by commercial banks and private creditors, whose net flows turned negative for the first time since 1999.
What this means
With Nigeria ranking among the top three largest IDA-eligible borrowers, the growing concentration of debt is heightening concerns about the country’s fiscal sustainability, its ability to service external obligations, and its exposure to global financial shocks.
The World Bank report signals the need for stronger debt transparency, more prudent borrowing practices, and improved domestic resource mobilization across vulnerable economies.
What you should know
Nigeria’s total public debt climbed to N152.39 trillion in the second quarter of 2025, up from N149.38 trillion recorded in the first quarter.
The Debt Management Office (DMO) reports that Nigeria’s external debt stood at $46.98 billion (N71.85 trillion) in June, up from $45.98 billion (N70.63 trillion) in March.
The agency also reported that Nigeria’s external debt service payments rose to $932.1 million in the second quarter of 2025.
