In 2024, Nigeria paid $2.32 billion in debt servicing to the World Bank and IMF, marking a substantial rise from $998.92 million in 2023. The IMF’s share surged to $1.63 billion primarily due to principal repayments, while World Bank payments totaled $689.44 million. Overall external debt servicing increased to $4.66 billion, highlighting a growing dependency on multilateral loans amid rising debt levels and financial strategies shifting towards equity investments.
In 2024, Nigeria has allocated $2.32 billion towards servicing its debts owed to the World Bank and the International Monetary Fund (IMF). This amount represents a significant increase from the $998.92 million paid in 2023, as indicated by data from the Debt Management Office (DMO). The increase signals a growing pressure on Nigeria’s fiscal landscape due to continual borrowing and repayment obligations.
A detailed examination of the external debt service expenditures reveals that Nigeria paid approximately $689.44 million to the World Bank. This included $663.23 million allocated to the International Development Association (IDA) and $26.21 million to the International Bank for Reconstruction and Development (IBRD). Conversely, payments to the IMF surged to $1.63 billion, comprising entirely of principal repayments without any interest charges recorded.
Year-over-year, payments to the two organizations surged by over 134 percent, driven predominantly by the repayments to the IMF. Nigeria’s total external debt servicing for 2024 is noted at $4.66 billion, a substantial rise from $3.5 billion in the prior year. Notably, multilateral creditors accounted for the majority, totaling $2.62 billion or 56 percent of the total external debt servicing.
The IMF alone represented 35 percent of Nigeria’s total external debt payments in 2024 and approximately 62 percent of payments directed to multilateral creditors. In contrast, payments to commercial creditors fell to $1.47 billion from $1.93 billion in 2023, alongside a rise in bilateral creditor payments from $344.57 million to $570.67 million.
World Bank loans, particularly through the IDA, have become increasingly important, with Nigeria paying over $663 million, which included $414.86 million in principal and $248.10 million in interest. Payments to the IBRD also rose due to increased interest costs. The combined share of payments to both financial institutions constituted 49.8 percent of Nigeria’s total external debt servicing in 2024, a significant growth from 27.8 percent in 2023.
Nigeria’s total external debt stock reached $45.78 billion by December 2024, an increase from $42.50 billion in the previous year, largely influenced by additional borrowings from the World Bank. As of December 2024, debt owed to the World Bank grew from $15.45 billion to $17.81 billion, representing a 15.3 percent year-on-year increase. This surge contrasts with the substantial drop in Nigeria’s debt to the IMF, which fell from $2.47 billion to $800.23 million in the same period.
The share of World Bank loans increased to 79.8 percent of Nigeria’s multilateral debt in 2024, representing 38.9 percent of the total external debt stock, while the IMF’s share decreased to 3.6 percent. Collectively, the World Bank and the IMF accounted for $18.61 billion, or 83.4 percent of Nigeria’s multilateral debt in 2024.
In light of these financial circumstances, Minister of Finance Wale Edun highlighted a strategic pivot from debt reliance towards equity investments and revenue generation. The Nigerian government aims to optimize state-owned enterprises and attract private sector investment while maintaining borrowing as a mechanism for essential reforms and financing, thus illustrating a complex balance in its fiscal strategies.
Nigeria’s 2024 debt servicing to the World Bank and IMF has reached $2.32 billion, significantly rising from the previous year. The surge in repayments, especially to the IMF, reflects a growing dependence on multilateral financing amid fragile economic conditions. With total external debt stock increasing to $45.78 billion, the country’s debt management strategies are crucial, particularly as reliance shifts towards equity and revenue generation while continuing to borrow for ongoing reforms.
Original Source: punchng.com
