Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The World Bank has weighed in on Nigeria's increasingly contentious borrowing debate, declaring that the country is not highly indebted but rather suffers from a persistently low revenue base — a distinction that has done little to quell public anxiety over the government's appetite for foreign loans and the nation's ballooning debt profile.
Mathew Verghis, the World Bank's Country Director for Nigeria, made the remarks on Friday during an interview with Channels Television. He described Nigeria as a "moderately indebted country" and insisted that West Africa's most populous nation does not have a high indebtedness problem but a low revenue problem.
Verghis explained that Nigeria borrows for the same reason many other countries do — to meet pressing developmental needs and bridge fiscal gaps. The primary issue, according to the institution, is not the accumulation of debt itself, but the government's limited capacity to generate sufficient domestic revenue. The World Bank emphasized that shifting focus toward revenue generation is critical for achieving better economic outcomes, including improved employment rates and a substantial reduction in poverty levels. "Focus should be on increasing revenue to lead to better outcomes, better jobs, and lower poverty," the bank advised.
However, the World Bank's classification of Nigeria as "moderately indebted" sits uncomfortably alongside the country's actual debt figures. According to the Debt Management Office, Nigeria's total public debt stood at N159.28 trillion as of December 31, 2025, comprising N84.85 trillion in domestic debt and N74.43 trillion in external debt. Nigeria's debt to the World Bank rose from $17.81 billion at the end of 2024 to $19.89 billion by December 2025, an increase of $2.08 billion. The country remains the World Bank's third-largest borrower after Bangladesh and Pakistan.
Yet the World Bank has continued to approve fresh loans for Nigeria. On July 1, 2026, it approved a $1.25 billion Development Policy Financing loan under its Nigeria Actions for Investment and Jobs Acceleration (NAIJA) programme, despite widespread public criticism over the country's rising debt profile. The bank also unveiled a new six-year Country Partnership Framework spanning 2026–2032.
While the World Bank's emphasis on revenue generation is not without merit — Nigeria's tax-to-GDP ratio remains one of the lowest in the world — the argument that the country is not highly indebted has been met with skepticism by many Nigerians who point to the government's debt servicing costs, which are projected at ₦15.81 trillion for 2026. Opposition figures have also weighed in. Former Vice President Atiku Abubakar has warned that Nigeria is drifting further into unsustainable debt with little improvement in citizens' welfare. Peter Obi has also expressed deep concern over the country's growing debt burden, calling for an urgent shift in borrowing practices.
The World Bank's assertion that Nigeria's problem is low revenue, not high debt, may be technically accurate in the narrow context of debt-to-GDP ratios. But for millions of Nigerians struggling with inflation, unemployment, and poverty, the distinction is academic. What matters is whether borrowed funds translate into tangible improvements in living standards — and on that front, the record is mixed at best. As the World Bank itself noted, "increasing revenue" is key to "better outcomes, better jobs, and lower poverty." But until the government demonstrates that it can spend borrowed funds productively and expand its revenue base without further burdening an already struggling population, the public's concern over borrowing is unlikely to subside.
📩 Stone Reporters News | 🌍 stonereportersnews.com
✉️ info@stonereportersnews.com | 📘 Facebook: Stone Reporters News | 🐦 X (Twitter): @StoneReportNew | 📸 Instagram: @stonereportersnews
Add comment
Comments