Undisbursed Loans Increase Nigeria’s W’Bank Debt 

Undisbursed loans may drive Nigeria’s debt to the World Bank from $12.72billion to $21.15billion, according to The Tide’s source.
It means that the loans, which are yet-to-be disbursed, can increase Nigeria’s debt to the World Bank by 66.27 per cent.
World Bank’s audited financial statements for the fiscal year, 2022, showed that the bank was yet to disburse about $8.12bn to Nigeria as at June 30, 2022.
A breakdown of the figure reveals that the undisbursed loans included $7.60bn from the International Development Association (IDA) and $514million from the International Bank for Reconstruction and Development (IBRD).
These undisbursed loans encompass loans approved but not signed as well as the signed loan commitments.
The international lending institution explained the yet-to-be disbursed loans, particularly the signed loan commitments, thus:
“Loans are not effective and disbursements do not start until the borrowers and/or guarantors take certain actions and furnish documents”.
Recall that the IBRD and IDA, which make up the World Bank, have, over the years, advanced loans to Nigeria.
While the IBRD lends to governments of middle-income and creditworthy low-income countries, the IDA provides concessionary loans (called credits) and grants to governments of the poorest countries.
The Debt Management Office had disclosed that Nigeria’s debt to the Washington-based bank was $12.72billion as at March 31, 2022.
A breakdown showed that Nigeria borrowed $12.23billion from the IDA and $486.10million from the IBRD.
Nigeria’s debt to the IDA and IBRD stood at $12.55billion and $486million respectively as of June 30, 2022, compared to $11.97billion and $410.60million in December 30, 2021.