Nigeria Ranked Fifth Country With High Debt Risk Exposure Of $11.7bn

The World Bank ranked Nigeria fifth among the top 10 countries with high debt risk exposure.

The multilateral lender said this in the financial statement for International Development Association.

The World Bank disclosed that Nigeria’s IDA debt stock is $11.7bn.

IDA’s financial records disclosed that Nigeria had a total undisbursed balance of $8.07bn, which includes $1.462bn loans approved but not yet signed and $6.61bn signed loan commitment.

The lender said in its financial statement that, “As of June 30, 2021, the ten countries with the highest exposures accounted for 66% of IDA’s total exposure.”

“IDA’s largest exposure to a single borrowing country, India, was $22 billion as of June 30, 2021. Monitoring these exposures relative to the SBL, requires consideration of the repayment profiles of existing loans, as well as disbursement profiles and projected new loans and guarantees.”

According to the bank, IDA faces two types of credit risk with the first being country credit risk and the second the counterparty credit risk.

Country credit risk is the risk of loss due to a country not meeting its contractual obligations, while the counterparty credit risk is the risk of loss attributable to a counterparty not honoring its contractual obligations.

India is the worst exposed country leading the list with $22bn IDA debt stock, while Bangladesh followed with $18.1bn IDA debt stock.

Pakistan’s IDA debt stock is $16.4bn, while Vietnam and Ethiopia’s IDA debt stock is$14.1bn Ethiopia with $11.2bn respectively.

Kenya has $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.

The report said Nigeria’s undisbursed balance with the World Bank is about $8.656bn as at June 30, 2021.

The financial statements of the International Bank for Reconstruction and Development, disclosed that Nigeria has a total of $589m undisbursed balance which is made up of $500m loans approved but has not been signed and $89m signed loan commitment.