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World Bank List Nigeria Among Countries With High Debt Risk

World Bank List Nigeria Among Countries With High Debt Risk

 

The World Bank has listed Nigeria among a list of top 10 countries with high debt risk exposure.

This was disclosed in the financial statement for International Development Association (IDA), which was among the World Bank FY21 audited financial statements released on Monday, 9th August 2021.

The financial statement read; “IDA faces two types of credit risk: country credit risk and counterparty credit risk.

“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.”

It further stated that “As of June 30, 2021, the 10 countries with the highest exposures accounted for 66 percent of IDA’s total exposure”.

On the list, Nigeria was rated fifth with $11.7bn IDA debt stock, while India led the list with $22bn IDA debt stock, followed by Bangladesh with $18.1bn IDA debt stock, Pakistan with $16.4bn IDA debt stock, and Vietnam with $14.1bn IDA debt stock.

Other countries on the list in order of appearance included Ethiopia with $11.2bn IDA debt stock, Kenya with $10.2bn IDA debt stock, Tanzania with $8.3bn IDA debt stock, Ghana with $5.6bn IDA debt stock, and Uganda with $4.4bn IDA debt stock.

It was further discovered that Nigeria’s undisbursed balance with the World Bank is about $8.656bn as of June 30, 2021.

Meanwhile, according to the financial statement for the International Bank for Reconstruction and Development, Nigeria has a total of $589m undisbursed balance, consisting of $500m loans approved but not yet signed and $89m signed loan commitment.

A total of $1bn loans were agreed between Nigeria and the World bank’s IBRD, of which Nigeria’s outstanding loan is $411m.
For IDA, a total of $19.54bn loans were agreed upon, of which Nigeria’s outstanding loan is $11.47bn.

According to the Debt Management Office, Nigeria owes the World Bank a total of $11.51bn, consisting of $11.10bn IDA loans and $410.23m IBRD loans as of March 31.

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