Former World Bank President David Malpass warned that Nigeria's strategy of pledging national assets to secure loans could backfire. He warned that this approach makes it much harder for the country to restructure its debt if a financial crisis hits.
In a 2026 World Bank paper, Malpass explained that these asset-backed loans in countries like Nigeria, Angola, and Senegal cause lenders to compete over who gets paid first.
If the economy gets worse, this competition can lead to major deadlocks.
This warning comes right after Nigeria took out $1.5 billion from a $5 billion loan deal with First Abu Dhabi Bank.
To get the money, Nigeria had to promise collateral worth about 133% of what it borrowed. This deal gives the country quick foreign cash without having to issue expensive standard bonds.
