By Uche Amunike
The World Bank has declared that Nigeria is among the outlined top 10 countries with high-debt risk exposure.
It stated this in the Financial Statement for International Development Association, IDA, Hwhich was among the World Bank FY21 audited financial statements released, Monday.
The statement said: ‘IDA faces two types of credit risk: country credit risk and counterparty credit risk’.
‘Country credit risk is the risk of loss due to a country not meeting its contractual obligations, and counterparty credit risk is the risk of loss attributable to a counterparty not honoring its contractual obligations’.
‘IDA is exposed to commercial as well as non-commercial counterparty credit risk.’
‘As of June 30, 2021, the 10 countries with the highest exposures accounted for 66 per cent of IDA’s total exposure.’
Nigeria was rated fifth on the list with $11.7bn IDA debt stock, while India led the list with $22bn IDA debt stock, followed by Bangladesh with $18.1bn IDA debt stock, Pakistan with $16.4bn IDA debt stock, and Vietnam with $14.1bn IDA debt stock.’
Other countries on the list in order of appearance included Ethiopia with $11.2bn IDA debt stock, Kenya with $10.2bn IDA debt stock, Tanzania with $8.3bn IDA debt stock, Ghana with $5.6bn IDA debt stock, and Uganda with $4.4bn IDA debt stock.
It also noted that there was a Single Borrower Limit for IDA which for FY22, have been set at $45bn (25% of $180.9bn) of equity as of June 30, 2021.
It further discovered that Nigeria’s undisbursed balance with the World Bank stands at about $8.656bn as at June 30, 2021.
The financial statements for the International Bank for Reconstruction and Development reveals that Nigeria has a total of $589m undisbursed balance, consisting of $500m loans approved but not yet signed and $89m signed loan commitment.
The financial statements for IDA shows that Nigeria has an undisbursed balance of $8.07bn consisting of $1.462bn loans approved but not yet signed and $6.61bn signed loan commitment.
The financial statements for IBRD disclosed that although certain amount of loans have been agreed, such loans are not effective and disbursements do not start until the borrowers or guarantors take certain actions and furnish documents.
A total of $1bn dollars was agreed between Nigeria and the World Bank’s IBRD which leaves Nigeria’s outstanding standard loan at $411m.
For IDA, a total of $19.54bn loans were agreed upon, of which Nigeria’s outstanding loan is $11.47bn.
As at March 31st, Nigeria owes the world Bank a total of $11.51b.
In the statement released by the International Finance Corporation and Multilateral Investment Guarantee Agency, titled ,’ World Bank Group Releases FY21 Audited Financial Statements’, the bank disclosed that the world Bank group commitments rose to $84.3bn in the FY20.
In his statement, the World Bank Group President, David Malpas said, ‘The World Bank Group support to client countries surged to $157bn over the last 15 months to address increased poverty, inequality, and the impacts of COVID-19.’
‘The unprecedented level of commitments helped countries strengthen health systems, protect the poor and vulnerable, support jobs and businesses, promote economic growth, and lay the foundation for a green, resilient and inclusive recovery,’ he concluded.
