Nigeria is one of the top ten countries with high debt risk exposure, according to the World Bank.
This was mentioned in the International Development Association’s financial statement, which was released alongside the World Bank’s FY21 audited financial statements on Monday.
“IDA confronts two categories of credit risk: country credit risk and counterparty credit risk,” according to the financial statement.
Country credit risk refers to the danger of a country failing to meet its contractual obligations, while counterparty credit risk refers to the risk of a counterparty failing to meet its contractual obligations.
“IDA is subject to credit risk from both commercial and noncommercial counterparties.”
“As of June 30, 2021, the ten nations with the highest exposures accounted for 66% of IDA’s overall exposure,” the report added.
Nigeria was ranked fifth on the list with $11.7 billion in IDA loan stock, while India was first with $22 billion in IDA debt stock, followed by Bangladesh with $18.1 billion, Pakistan with $16.4 billion, and Vietnam with $14.1 billion.
Ethiopia had $11.2 billion in IDA debt stock, Kenya had $10.2 billion in IDA debt stock, Tanzania had $8.3 billion in IDA debt stock, Ghana had $5.6 billion in IDA debt stock, and Uganda had $4.4 billion in IDA debt stock.
It further said that IDA has a Single Borrower Limit of $45 billion for FY22 (25 percent of $180.9 billion in equity as of June 30, 2021).
Nigeria’s undisbursed balance with the World Bank, as of June 30, 2021, was estimated to be around $8.656 billion.
Nigeria has a total undisbursed balance of $589 million, according to the International Bank for Reconstruction and Development’s financial statement, consisting of $500 million in loans approved but not yet signed and $89 million in signed loan commitments.
Nigeria had an undisbursed balance of $8.07 billion, according to the IDA financial statement, consisting of $1.462 billion in authorized but unsigned loans and $6.61 billion in signed loan commitments.
Although a particular amount of loans has been agreed upon, ‘the loans are not active and disbursements do not begin until the borrowers and/or guarantors execute specified activities and provide documents,’ according to the IBRD financial statement.
Nigeria and the World Bank’s IBRD agreed to a total of $1 billion in loans, with Nigeria owing $411 million.
A total of $19.54 billion in IDA loans were agreed upon, with Nigeria owing $11.47 billion.
Nigeria owes the World Bank a total of $11.51 billion as of March 31, according to the Debt Management Office, consisting of $11.10 billion in IDA loans and $410.23 million in IBRD loans.
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Financial statements for the International Finance Corporation and the Multilateral Investment Guarantee Agency were also released.
The World Bank Group’s obligations increased by 15% to $84.3 billion in fiscal year 2021, according to a news release titled “World Bank Group Releases FY21 Audited Financial Statements.”
“The World Bank Group support to client nations skyrocketed to $157 billion over the previous 15 months to confront growing poverty, inequality, and the implications of COVID-19,” said World Bank Group President David Malpass in a statement.
He went on to say that the record level of commitments aided countries in strengthening health systems, protecting the poor and vulnerable, promoting economic growth, and laying the groundwork for a green, resilient, and inclusive recovery.
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