A report by the World Bank has listed Nigeria among countries with the highest debt risk exposure across the world.
The details are contained in the fiscal year 2021 (FY21) financial statement of the International Development Association (IDA), a World Bank financial institution that offers concessional loans and grants to the poorest developing countries.
According to the report, with debt exposure of $11.7 billion, Nigeria ranked fifth among the top 10 countries with highest debt risk exposure.
The top four countries are India with $22 billion, Bangladesh ($18.1 billion), Pakistan ($16.4 billion), and Vietnam ($14.1 billion).
Other countries on the list are Ethiopia ($11.2 billion), Kenya ($10.2 billion), Tanzania ($8.3 billion), Ghana ($5.6 billion), and Uganda ($4.4 billion).
In 2022, the organization said the single borrower limit (SBL) has been set at $45 billion, about 25 percent of $180.9 billion of equity as of June 30, 2021.
It added that the figure is “marginally higher” than that of 2021.
“As of June 30, 2021, the ten countries with the highest exposures accounted for 66% of IDA’s total exposure,” the organization said.
“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.”
The financial report revealed further that a total of $19.5 billion loans would be disbursed to Nigeria.
The breakdown include $1.46 billion loan approved but not yet signed, $6.61 billion signed loan commitment, and $11.47 billion outstanding loan.
IDA in its report said it participated in two comprehensive debt relief initiatives, adopted by the global development community to reduce the debt burdens of developing countries. In each case, the organization said it agreed to provide debt relief in return for future compensation from members for forgone reflows, ensuring that its financial capacity would not be reduced.
It added: “For a borrower to be eligible for debt relief on its loans with IDA, it is required to maintain macroeconomic stability, carry out key structural and social reforms, and maintain all loans in accrual status.”
The organization noted, however, that when a borrower fails to make payments on any principal, interest, or other charges due to IDA, it may suspend disbursements immediately on all loans and grants to that borrower.
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