Nigeria’s IDA debt hits $11.7bn, says DMO

Nigeria’s International Development Association (IDA)’s Debt Stock stands at USD11.7 billion, the Debt Management Office (DMO), has said.

IDA loans represent one of the most favourable borrowing options for countries like Nigeria and are also consistent with the Medium Term Debt Management Strategy of the Federal Government,” DMO said in a statement on Wednesday.

In response to claims that Nigeria is a high-debt risk nation, the DMO said the World Bank’s report “focused only on the composition of IDA’s Loan Portfolio and did not make any reference to the debt sustainability of the top 10 beneficiary countries of IDA loans, such as India, Pakistan, Nigeria, Kenya and Ghana that the report erroneously referred to as ‘high-debt risk nations.”

According to the DMO, “IDA loans are typically for tenors of between 30-40 years, grace period (moratorium on principal repayment) of seven-10 years and service fee of only 0.75 per cent.”

The highly concessional nature of IDA loans, the DMO added, “satisfies the requirements of the provision of Section 41(1)(a) of the Fiscal Responsibility Act, 2007, which states that government at all tiers shall only borrow on concessional terms with a low-interest rate and with a reasonably long amortisation period.”

The World Bank’s Report described Nigeria as a high-debt risk nation, but the DMO said the report “was an assessment of the performance of IDA and not the performance of the IDA loans nor the debt repayment capacity of the beneficiaries of IDA loans.”

The World Bank, through IDA, gives concessional loans to poor and developing countries to help them achieve improvements in growth, job creation, poverty reduction, governance, the environment, climate adaptation and resilience, human capital, infrastructure, and debt transparency. Nigeria is a beneficiary of IDA loans.

The highly concessional nature of IDA loans, the DMO added, “satisfies the requirements of the provision of Section 41(1)(a) of the Fiscal Responsibility Act, 2007, which states that government at all tiers shall only borrow on concessional terms with a low-interest rate and with a reasonably long amortisation period.”