Nigeria has been ranked the fourth country in the world with the highest debt according to the World Bank’s newly released financial report for the fiscal year of 2022 audited financial statements for the International Development Association, (IDA).
Nigeria, which has the highest IDA debt stock in Africa, increased its debt to $13bn since June 30, 2022, from $11.7bn in June, 2021
Other countries in the top five position are India in the first position, Bangladesh in the second position, Pakistan in the third position, and Vietnam in the fifth position.
Whereas the other top 5 countries reduced their debts between 2021 and 2022, Nigeria increased its debt by 11.11percent after accumulating an additional $1.3bn to the existing $11.7bn from the last fiscal year.
India reduced its debt from $22bn in 2021 to $19.7bn in 2022; Bangladesh, from $18.1bn to $18b; Pakistan, from $16.4bn to $15.8bn, and Vietnam’s debt reduced from $14.1bn to $12.9bn.
This debt is different from the outstanding loan of $486million from the World Bank’s International Bank for Reconstruction and Development.
According to the World Bank, even though Nigeria’s current debt may be considered sustainable for now, it is vulnerable and costly, especially considering the large and growing debt financing of the Central Bank of Nigeria. Thus, the country’s debt is at risk of becoming unsustainable in the event of macro-fiscal shocks.
The World Bank also said the country is not far from experiencing a financial and economic crisis due to the increasing cost of debt servicing which has disrupted public investment and critical service delivery spending.