Nigeria World Bank debt increase hits $19.89bn in 2025, raising concerns over fiscal pressure and growing reliance on external borrowing

Nigeria’s debt to the World Bank rose sharply by $2.08bn to $19.89bn as of 31 December 2025, according to new data released by the Debt Management Office, underscoring mounting fiscal pressures on Africa’s largest economy.

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The Nigeria World Bank debt increase represents an 11.7 per cent rise from $17.81bn recorded at the end of 2024, reflecting continued reliance on concessional and semi-concessional financing amid tight budget conditions.

The debt stock comprises loans from the International Development Association and the International Bank for Reconstruction and Development.

The International Development Association, which provides low-interest financing to poorer countries, accounted for the bulk of the increase, rising from $16.56bn to $18.51bn.

Exposure to the International Bank for Reconstruction and Development also climbed, albeit modestly, from $1.24bn to $1.38bn over the same period.

Despite the increase, the share of World Bank loans in Nigeria’s total external debt dipped slightly to 38.36 per cent in 2025, down from 38.90 per cent in 2024.

This marginal decline came as other borrowing categories, particularly commercial and syndicated project loans, expanded at a faster pace.

Overall, Nigeria’s external debt rose by a striking $6.08bn, or 13.27 per cent, from $45.78bn in 2024 to $51.86bn in 2025.

The World Bank accounted for roughly a third of that growth, reinforcing its position as the country’s largest single external creditor group.

A significant portion of the increase was driven by commercial obligations, including syndicated project loans, while Eurobond debt also climbed from $17.32bn to $18.55bn.

Multilateral debt rose to $23.85bn, and bilateral debt increased to $6.72bn, highlighting a broad-based expansion in external borrowing.

The Nigeria World Bank debt increase reflects a persistent tilt towards multilateral lenders, with the global institution accounting for more than four-fifths of the multilateral debt stock.

Analysts say this trend points to the Federal Government’s preference for cheaper, longer-tenor funding sources as access to market-based financing remains constrained.

Economists, however, have warned that the rising loan pipeline could intensify fiscal strain if not matched with stronger revenue generation and disciplined spending.

A Lagos-based economist, Adewale Abimbola, said concessional loans from institutions such as the World Bank are generally favourable due to lower interest rates and extended repayment periods.

Adewale Abimbola stressed that the key issue lies in how effectively the funds are utilised.

“Borrowing isn’t bad; what matters is utilisation,” Adewale Abimbola said, noting that loans tied to viable, revenue-generating projects could support sustainable growth.

Meanwhile, development economist and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, expressed concern over the country’s growing debt burden.

Dr Aliyu Ilias questioned the rationale for increased borrowing at a time when government revenues are reportedly improving.

Dr Aliyu Ilias warned that rising debt service obligations are already constraining public spending, particularly in capital projects, with implications for infrastructure development and service delivery.

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The latest figures highlight the delicate balance facing policymakers as Nigeria seeks to finance development priorities while managing an increasingly complex and costly debt profile.