Double-Standards, Debt Treatment, and World Bank Country Classification: The Case of Nigeria

36 Pages Posted: 26 Mar 2008

See all articles by Todd J. Moss

Todd J. Moss

Center for Global Development

Scott Standley

Center for Global Development

Nancy Birdsall

Center for Global Development

Date Written: September 1, 2004

Abstract

Nigeria is currently classified by the World Bank as a "blend" country, making it the poorest country in the world that does not have "IDA-only" status. This paper uses the World Bank's own IDA eligibility criteria to assess whether Nigeria has a case for reclassification. Given that the country has not borrowed from IBRD for the past eleven years, such a change would merely recognize what is already de facto the case. Based on our analysis, Nigeria clearly qualifies as IDA-only based on its low income level and lack of creditworthiness. Its record of policy performance appears to be the final barrier, but we show it is no worse on performance than three African comparator groups: the current IDA-only pool, previous reverse-graduates, and the IDA-only oil producers. We also question the logic of this criterion for IDA-only "eligibility" (though not of course for actual allocation or disbursements). Certainly, Africa's three previous reverse-graduates and Angola's current IDA-only status suggest that Nigeria is facing a double-standard. We thus conclude that Nigeria does have a strong case for reclassification. Nigeria has good reason to request such a change as it would allow it more equal consideration of its access to IDA grants (restricted to IDA-only countries) including for HIV/AIDS programs and its allocation of IDA loans. Reclassification would also strengthen the case for Nigeria receiving an immediate write-down of a large portion of its debt to bilateral donors (along the lines of concessional Naples terms for IDA-only countries), which we argue is critical to any hope that the current government's economic and political reform efforts can be sustained. The creditors have good reason for supporting such a change as part of a broader strategy for encouraging progress in Africa's most populous country, and one that is key to stabilizing a region where internal conflict and Islamic radicalism create threats to global security.

Keywords: Nigeria, International Development Association, World Bank, international development, economic development

Suggested Citation

Moss, Todd J. and Standley, Scott and Birdsall, Nancy, Double-Standards, Debt Treatment, and World Bank Country Classification: The Case of Nigeria (September 1, 2004). Center for Global Development Working Paper No. 45. Available at SSRN: https://ssrn.com/abstract=1112778 or http://dx.doi.org/10.2139/ssrn.1112778

Todd J. Moss (Contact Author)

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Scott Standley

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Nancy Birdsall

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States
202-416-0700 (Phone)

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