Nigeria’s growing dependence on collateral-backed loans could severely complicate its ability to restructure debt in the future, David Malpass, former World Bank President, has warned. His caution echoes concerns already raised by international financial institutions regarding the country’s complex borrowing tactics.
In a policy paper released as part of the World Bank’s Annual Bank Conference on Development Economics (ABCDE) 2026, Malpass said collateralised sovereign transactions in countries including Nigeria, Angola and Senegal were creating a “race toward seniority” among creditors that could complicate debt workouts if financial conditions deteriorate.
“Sophisticated new collateralised transactions… are creating a new race toward seniority in the capital structure,” Malpass wrote in the paper, Public Debt and Central Banks. “This will add further complexity to restructurings.”
His comments come weeks after Nigeria drew $1.5 billion from a $5 billion financing facility arranged with First Abu Dhabi Bank. This transaction has attracted scrutiny from investors, the
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