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Double-Standards, Debt Treatment, and World Bank Country Classification: The Case of Nigeria-Revised November 2004

Author

Listed:
  • Todd Moss
  • Scott Standley
  • Nancy Birdsall

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.

Suggested Citation

  • Todd Moss & Scott Standley & Nancy Birdsall, 2004. "Double-Standards, Debt Treatment, and World Bank Country Classification: The Case of Nigeria-Revised November 2004," Working Papers 45, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:45
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    File URL: http://www.cgdev.org/content/publications/detail/2741
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    Citations

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    Cited by:

    1. Todd Moss & Stephanie Majerowicz, 2012. "No Longer Poor: Ghana’s New Income Status and Implications of Graduation from IDA," Working Papers 300, Center for Global Development.
    2. Carrie B Dolan & McKinley Saunders & Ariel BenYishay, 2020. "Childhood health and the changing distribution of foreign aid: Evidence from Nigeria's transition to lower-middle-income status," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-13, November.
    3. Andrew Kerner & Morten Jerven & Alison Beatty, 2017. "Does it pay to be poor? Testing for systematically underreported GNI estimates," The Review of International Organizations, Springer, vol. 12(1), pages 1-38, March.

    More about this item

    Keywords

    Nigeria; debt; World Bank; IDA; poverty; global security;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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