Nigeria, Bangladesh, and Pakistan Drive 30% of IDA External Debt, World Bank Reports

Nigeria is facing intense scrutiny regarding its external debt portfolio after the World Bank’s International Debt Report 2025 revealed that the country, along with Bangladesh and Pakistan, now collectively accounts for nearly 30 percent of the total external debt owed by nations eligible for support from the International Development Association (IDA).

The report, released on Wednesday, paints a complex picture of the shifting financial landscape for the world’s poorest countries, noting rising net debt inflows, increasing reliance on multilateral institutions like the World Bank itself, and a worrying concentration of debt among a few large borrowers.

Debt Concentration and the Unsustainability Warning

The concentration of debt among a handful of major nations has become increasingly pronounced. The report stated that just seven countries among the top ten IDA-eligible borrowers hold over half of all IDA-eligible external debt, highlighting the disproportionate risk carried by these economies.

While the World Bank did not single out Nigeria for a specific warning in the public release, the findings align with recent alarms raised by local financial experts who suggest that Nigeria’s public debt is now approaching “dangerously unsustainable levels.”

Structure of External Debt Remains Fixed

Despite the changing volume, the underlying structure of long-term external debt among IDA-eligible nations has remained remarkably stable over the past decade:

• Public and Publicly Guaranteed (PPG) Debt: This remains the dominant component, accounting for 75 per cent of the total external debt. PPG debt includes all long-term external obligations owed by a country’s public sector, or any private-sector debt that is backed by a government guarantee.

• Private Non-Guaranteed (PNG) Debt: This covers the remaining 25 per cent, representing long-term external obligations incurred by private companies or individuals that carry no sovereign guarantee.

The report noted that in 2024, the debt stock of PPG borrowers increased by 2.8 per cent to US$816.5 billion, whereas PNG borrowers saw a slight decline to US$241.9 billion.

Global Borrowing Snapshot

While Nigeria is highlighted for its concentration risk within the IDA category, the World Bank’s list of the top ten overall borrowers globally (excluding internal domestic debt) remains dominated by major economies, reflecting the sheer size of their national obligations:

1. China

2. India

3. Brazil

4. Mexico

5. Türkiye

6. Indonesia

7. Argentina

8. Colombia

9. Ukraine

10. Thailand

The International Debt Report 2025 underscores the critical challenge facing developing nations: the need to navigate global financing for infrastructure and development while mitigating escalating debt vulnerabilities.