The Federal Government is advancing discussions with the World Bank over a fresh $1.25bn loan facility aimed at supporting economic reforms, investment growth, job creation, and competitiveness in Nigeria.
Findings by The PUNCH showed that the proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration, has reached a critical stage in the lender’s approval process and is expected to be presented for approval on June 26, 2026 — about seven months before Nigeria’s 2027 presidential election.
If approved, the loan will become the second-largest single World Bank facility secured under President Bola Ahmed Tinubu, behind only the $1.5bn Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
At the current exchange rate of N1,361.4 to the dollar, the proposed facility is valued at approximately N1.70tn, highlighting the scale of external financing being pursued by the Federal Government amid ongoing reforms.
The loan, if fully approved and disbursed, would increase Nigeria’s external debt from N74.43tn ($51.86bn) as of December 31, 2025, to at least N76.13tn ($53.11bn).
Similarly, the country’s total public debt could rise from N159.28tn to N160.98tn, while total public debt in dollar terms may climb from $110.97bn to about $112.22bn.
Documents obtained from the World Bank showed that the operation has moved beyond the concept and appraisal phases and is now at the “decision meeting” stage of the bank’s project cycle.
The stage represents one of the final internal clearance processes before the project is presented to the Board of Executive Directors for formal approval.
According to the World Bank document, “The review did authorise the team to appraise and negotiate,” indicating that negotiations and major policy commitments have largely been concluded between Nigeria and the lender.
The borrower is listed as the Federal Republic of Nigeria, while the Federal Ministry of Finance will serve as the implementing agency.
The World Bank said the loan is designed to support government efforts aimed at expanding access to finance, digital services, and electricity while improving competitiveness through tax, trade, and agricultural reforms.
The fresh borrowing move comes amid increasing scrutiny of Nigeria’s rising dependence on multilateral financing under Tinubu’s administration.
Findings showed that the World Bank has approved about $9.35bn in loans and credits for Nigeria between June 2023 and May 2026.
The approvals cut across sectors including power, education, healthcare, agriculture, social protection, renewable energy, MSME financing, and economic reform support.
Major approvals during the period include the $2.25bn RESET and ARMOR reform financing in June 2024, $1.57bn for HOPE and SPIN programmes in September 2024, and $1.08bn for education and resilience programmes approved in March 2025.
If the proposed $1.25bn facility is eventually approved, total World Bank approvals secured under Tinubu would rise to approximately $10.6bn.
However, many of the facilities are tied to strict policy and reform conditions, meaning disbursement is often done in phases rather than as a lump-sum payment.
Meanwhile, the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, recently warned that Nigeria may reject World Bank loan facilities if delays in approval and disbursement continue.
Speaking during a meeting with a World Bank delegation in Abuja, Ogunjimi stressed that Nigeria expects faster processing timelines since the facilities are loans and not grants.
“If approvals take more than six months, the Nigerian Government may no longer honour such arrangements,” he said.
The World Bank’s Senior External Affairs Officer, Mansir Nasir, however, explained that project financing is usually disbursed in instalments depending on the nature of the project and financing structure.
Data from the Debt Management Office also showed that Nigeria’s debt to the World Bank rose by $2.08bn within one year to $19.89bn as of December 31, 2025.
The debt includes obligations owed to the International Development Association and the International Bank for Reconstruction and Development.
According to the DMO, IDA debt increased from $16.56bn in 2024 to $18.51bn in 2025, while IBRD exposure rose from $1.24bn to $1.38bn.
The figures indicate that World Bank loans accounted for 38.36 per cent of Nigeria’s total external debt stock of $51.86bn as of the end of 2025.
The proposed loan is aligned with the World Bank’s Country Partnership Framework and forms part of broader interventions including FINCLUDE, BRIDGE, AGROW, ARMOR, and DARES programmes.
The lender said the facility is expected to support economic growth through reduced food and input costs, improved agricultural productivity, expansion of digital services, stronger financial markets, improved electricity access, increased private investment, and better tax revenue mobilisation.
However, the World Bank warned that the programme carries significant political and governance risks ahead of the 2027 elections.
“Overall, the risk to this DPF is assessed as high. Political and governance risks are elevated ahead of the 2027 elections, with pressures that could delay or reverse sensitive reforms,” the bank stated.
Economists have also expressed concerns over Nigeria’s rising debt profile.
Lagos-based economist, Adewale Abimbola, said concessionary loans from multilateral institutions are not necessarily harmful if properly utilised for productive projects capable of generating long-term revenue.
“Borrowing isn’t bad; what matters is utilisation,” he stated.
Development economist and CEO of CSA Advisory, Aliyu Ilias, questioned the government’s continued borrowing despite claims of improved revenue following the removal of fuel subsidy.
Similarly, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, warned that excessive foreign borrowing could worsen exchange rate pressures and deepen fiscal vulnerabilities if not properly managed.
The Nigerian Economic Summit Group also warned that Nigeria’s debt outlook remains fragile despite apparent improvements in headline indicators.
In its latest Debt Burden Monitor report, the NESG said Nigeria’s Debt Burden Index declined from 83.6 points in 2023 to 70.9 points in 2024, but cautioned that the improvement was largely driven by temporary easing in debt service pressures rather than genuine fiscal strengthening.
According to the group, Nigeria remains in a high-risk fiscal environment, warning that continued borrowing without stronger revenue mobilisation and prudent fiscal management could worsen the country’s long-term debt sustainability challenges.
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