Nigeria’s $18bn World Bank Debt: Where Are the Results?

Added: 2026-06-02

[00:00:07]Nigeria is now reportedly the third largest borrower from the World Bank with exposure estimated at over $18 billion even at the federal as the federal government continues to seek fresh external financing. While the presidency argues Nigeria's debt profile remains moderate compared to countries like Egypt and South Africa, critics insist the concerns aside from being about the amount which by the end of December 2025 stood at 159.28 trillion naira. But what is the country getting in return? Where are the dividends? Where's the evidence of all this borrowing? Earlier I spoke with Yemi Kale, who is the country director for Budget Nigeria. Here's what he had to say. All right, we'll come back to that, but joining us now live for the conversation is Wale Odunlami. He is an economic analyst and CEO of Caska Advisory. Thank you for joining us this morning.

[00:01:01]>> Thank you very much, thanks for having me.

[00:01:02]>> Yes, the pleasure. Um, we know that Nigeria remained the third largest borrower from the World Bank's International Development Association IDA in the first quarter of 2026.

[00:01:14]Pakistan, Bangladesh, Nigeria. I mean, is this our league? Is this where we should be playing?

[00:01:21]>> Yeah, thanks a lot, Joanna. So, you know, whenever the issue of debt conversation comes up, there's usually a way I like to reframe it.

[00:01:30]Um, and there are certain numbers I must share up front when it comes to debt conversations.

[00:01:36]You know, what everybody typically says when it comes to debt conversations is, "Oh, you know, the debt-to-GDP ratio is 32%.

[00:01:45]We're still under 70."

[00:01:47]Uh, well, the one that matters is the debt service to revenue, which, you know, in recent times has been as high as 90%.

[00:01:56]And the one nobody quotes at all, you won't hear it anywhere, is the output per worker in Nigeria. Let me give you an idea.

[00:02:08]Egypt's output per hour is about $26.

[00:02:14]Um South Africa is about $23.

[00:02:18]Nigeria is $7. Now, why am I mentioning this?

[00:02:24]The first number of 32% GDP debt to GDP ratio is That's like a government's comfort zone. Everybody like to talk about that.

[00:02:33]The second debt to service debt debt service to to to our revenue is for me the warning light.

[00:02:43]The third one is the disease.

[00:02:46]Now, that third one, that $7 output per hour that every Nigerian is working, that's the one we need to keep our Keep Keep Keep a very good eye on. Now, you talked about the league.

[00:03:02]Are we in the right league?

[00:03:04]Well, again, I'd like to say the league table, you know, we're looking at it sort of a wrong scoreboard, if you ask me.

[00:03:10]Um Bangladesh, you know, is is a top most borrower.

[00:03:14]But you see, they've been able to turn that borrowing into a 45 billion export economy in terms of the garment.

[00:03:24]So, for me, the question is not who really borrows most. It's It's um It's have you converted that borrowing into production? As an example. And you see, this for me is where Nigeria's story is. And I'm Between you and I, we know it's not It's not a flattering flattering story.

[00:03:46]That's how I like to respond to that first question.

[00:03:49]>> Mhm. Interesting. So, there's a lot of context here uh to be considered. And the defense of all our debt-to-GDP ratio is still fair compared to peers, um you know, may not be a good metrics to assess uh debt sustainability. I would like to come back to, you know, what uh the country director of budget, you know, said. And I I believe we have that um clip now. He says that we are not spending enough in Nigeria. Um and I would love to get your thoughts on that in just a moment. But let's have a listen to Viola Kwaga.

[00:04:22]>> Look at our our peer our peer nations on the continent, the Kenya's, the South Africa's of this world spend two to three times what we spend on their annual expenditure. The way the government spends money is really what should be questioned. Uh I I saw an op-ed by the director general of the budget office uh Dr. Tanimu uh Dr. Tanimu, where he uh was making the case that uh Nigerians are not being objective with their uh response and their position against uh the president. Now, uh I I hope he watches this interview. Nigerians are not against the government borrowing uh Dr. Tanimu. What we are against is the way the money is used, the transparency through which these monies are collected, and the clear lack of accountability.

[00:05:17]Now, this is not just an executive fault. This is also a fault of the parliament because the parliament is meant to serve as a check and a balance to the executive. I say that if the legislature at all levels really did its job in Nigeria, organizations like mine would not exist because what we are doing is essentially what the parliament should be doing, shining the light and demanding that the executive be accountable and answerable, you know, to the people.

[00:05:46]>> I think that's an interesting take from the budget director from budget there and I'm coming back to you what is being said here is that you know we actually not spending enough right so the issue is not the borrowing but the spending and not that we are spending too much but on the how we're spending what are your thoughts on that?

[00:06:06]>> So if everything you said I agree with you 110% So currently we're not spending enough as it were we're not borrowing enough and we're not spending enough but you see he asked a question what exactly are we spending on? So let me give you a classic example so our debt exposure to the World Bank today is somewhere around 18 19 billion US dollars.

[00:06:33]How many power plants have we built with it? You know how many deep sea port have we built with it?

[00:06:42]What real lines have we come up with?

[00:06:45]In terms of what we've spent so for me it's always the it's the productive asset that you've created with the spending that actually matters versus what you have borrowed now.

[00:06:57]I've referred to this document so many times it's a planning document it's the it's the Nigerian integrated infrastructure master plan.

[00:07:04]There must be something that guides how we borrow and what we spend on.

[00:07:11]That has always been my position if there's nothing guiding you know how you borrow and how you spend across a national theme look let me add this all MDs in fact the entire government should have a central theme that guides how we borrow and what we spend it on.

[00:07:30]In a productive manner until we start to do that we will continue to borrow in bits and pieces then you know wait and say well we're waiting for um agency to sort of top it up for us because what we've borrowed is not There's no uh what would I call it now? There's no central thinking around it. There's no big picture perspective around it, which is why today today because we're you know I mentioned something earlier.

[00:07:58]We're spending as close as 60 kobo on every naira we're earning. So, whatever else we're borrowing, we're actually borrowing today to pay off what we have borrowed, interest that we have already borrowed before. And remember, we didn't borrow to be productive. We borrowed to spend on consumables.

[00:08:22]You know there's corruption around the place and all of these other things.

[00:08:26]That is the central challenge. You know, anytime we're having this um um um debt conversation.

[00:08:33]>> Mhm. And I guess it doesn't help help that we haven't really gotten our hands on the budget implementation report to assess how and what we're spending on.

[00:08:42]Uh we're just hearing announcements. Uh but of course this is focused on the World Bank's uh you know, our relationship with and when it comes to debt with the World Bank. And we've seen that relationship evolve and a lot of headlines come up from you know, our relationship with the World Bank here in Nigeria specifically. Not so long ago we had the AGF one that Nigeria may reject delayed World Bank loans. Just a couple of days ago, you know, there was an announcement that federal government had canceled one of the borrowing uh programs with the World Bank Group. Uh what are your thoughts on how our relationship with the World Bank is evolving? Also in context of us paying off IMF loans.

[00:09:17]Um so yeah, what are your thoughts around that?

[00:09:20]>> Yeah, you know, this this is what I was just saying, you know, just just just the last conversation, yeah.

[00:09:26]So, you see that whenever a program ends, you know, or one loan gets delayed, um we usually have no coherent response. You know, there's there's no central economic logic, you know, that says this is this is what we need the money for. Look, um I'm I'm very big on national strategy.

[00:09:48]Now, when you borrow without a binding national strategy, every individual loan shows up as a transaction, you know, that has to be negotiated on its own merit, on its own terms.

[00:10:04]You know, so what will happen is, you know, you're canceling some loans, you're chasing some loans. There there is no economies of scale around how you want to borrow. Let me give you an example.

[00:10:17]If we have a national plan that says we want to borrow for the next 10 years, you know, this amount, and this is what we want to use it for for the next 10 years.

[00:10:29]What you will naturally find very quickly is that anybody borrowing you a loan is borrowing you that loan within a certain context. So, it's not a standalone anymore now. What is this story telling me? It tells me that, look, um the absence of a Nigerian strategy, as it were, you know, um that that the World Bank, you know, the relationship with World Bank is supposed to serve a country strategy. The absence of that coordinated country strategy around our developmental initiatives is where the major problem is.

[00:11:04][clears throat] And I don't see, you know, I don't see getting better any sooner except we come up with one. What would I call it? A central economic logic deciding, look, over the next 10 years, this is what Nigeria as a country wants to use X Y Z borrowings for. This ties back to the earlier point that that that the commentator made that, look, we're not even borrowing enough. We're not.

[00:11:31]Because, you see, if you look at the natural integrated master plan that was done, we actually need something close to about 2.3 trillion dollars over a 30-year period.

[00:11:44]30-year period. Now, what that comes to the Buhari administration that left updated that document. And they said, "Look, for the first 5 years to even create accelerated development, we need 150 billion US dollars per annum."

[00:12:00]This is a country operating on a 40 billion dollars strategy per annum.

[00:12:04]Where are you going to get the money from?

[00:12:06]So, without that coordinated strategy that says, "Look, this is what we're trying to do with all the borrowings over the next 10 years." You could even do it 8 years. I'll leave I'll leave that to the discretion of of the of the government. The duration, you know, something that's sizable.

[00:12:21]That's when, you know, we begin to get a better relationship with with with our borrowers and the government.

[00:12:28]>> So, so, from all you said, take away here is there's nothing wrong with our debt, right? Um we even need to borrow more, spend more, but there needs to be a method to the madness, right? There needs to be strategy guiding the borrowing.

[00:12:43]>> Correct.

[00:12:44]>> Yeah. All right, thank you very much.

[00:12:46]Interesting getting your perspective on the show today. Economic analyst and CEO of Catherina Advisory, Wale Ogunade.

[00:12:53]Thank you once again.

[00:12:55]>> Thank you very much, Anna, for having me. Good morning, everyone.

[00:12:57]>> Good morning.

[00:13:00]>> [music]