The Federal Government has stepped up engagement with the World Bank for a fresh $1.25 billion loan to support economic reforms, job creation, and competitiveness, as findings showed that the facility has reached a critical stage in the lender’s approval process.
The proposed loan, titled Nigeria Actions for Investment and Jobs Acceleration, is expected to be presented for approval on June 26, 2026, about six months and 21 days before the January 16, 2027, presidential election, according to the revised timetable of the Independent National Electoral Commission.
If approved, the loan will rank as the second-largest single World Bank facility secured under President Bola Tinubu, behind only the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
At an exchange rate of ₦1,361.4 to the dollar, the proposed $1.25 billion facility translates to about ₦1.70 trillion, showing the scale of external financing being pursued by the Federal Government amid ongoing economic reforms.
If approved and fully disbursed without any delay, the proposed $1.25 billion World Bank loan, equivalent to about ₦1.70 trillion at an exchange rate of ₦1,361.4/$, will raise Nigeria’s external debt from ₦74.43 trillion ($51.86 billion) as of December 31, 2025, to at least ₦76.13 trillion ($53.11 billion).
The country’s total public debt would also rise from ₦159.28 trillion to at least ₦160.98 trillion. In dollar terms, Nigeria’s total public debt could rise from $110.97 billion to about $112.22 billion if the facility is eventually approved and fully disbursed.
Details of the facility were contained in a World Bank Programme Information Document obtained on Monday, which showed that the loan has progressed beyond the initial concept and appraisal phases.
Crucially, the operation is now at the decision meeting stage of the World Bank’s project cycle, a point at which the lender’s management reviews the final appraisal package and determines whether the project should proceed to the Board of Executive Directors for approval.
This stage typically comes after appraisal and negotiations have been substantially concluded, meaning that key policy actions, financing terms, and reform commitments have already been agreed in principle between the borrower and the World Bank team.
In the World Bank process, the decision meeting represents a near-final internal clearance, after which the project is prepared for formal Board consideration, where final approval is granted.
Supporting this position, the World Bank document stated, “The review did authorise the team to appraise and negotiate,” indicating that the project has successfully passed earlier internal checks and is advancing toward final approval.
The borrower is listed as the Federal Republic of Nigeria, while the Federal Ministry of Finance will serve as the implementing agency.
According to the World Bank, the loan is designed “to support the government’s efforts to expand access to finance, digital, and electricity services, and strengthen competitiveness through tax, trade, and agriculture reforms.”
The fresh borrowing move comes amid growing scrutiny of Nigeria’s rising reliance on multilateral financing under Tinubu. Findings showed that the World Bank has approved about $9.35 billion in loans and credits for Nigeria between June 2023 and May 2026.
These approvals span multiple sectors, including power, education, healthcare, agriculture, social protection, renewable energy, MSME financing, and economic reform support. Key packages include the $2.25 billion RESET and ARMOR reform financing in June 2024, $1.57 billion for HOPE and SPIN programmes in September 2024, and $1.08 billion for education and resilience programmes in March 2025.
If the proposed $1.25 billion facility is approved next month, total World Bank approvals under Tinubu would rise to about $10.6 billion, reinforcing the bank’s role as a major external financier for Nigeria’s reform agenda.
However, many of the approved loans are not immediately disbursed, as fund releases are tied to the fulfilment of specific policy and reform conditions, often resulting in delays.
Govt warns
The Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, earlier warned that Nigeria may reject loan facilities from the World Bank if delays in approval and disbursement persist, saying prolonged timelines could undermine the country’s willingness to proceed with such arrangements.
The warning was contained in a press statement last week by the Director of Press and Public Relations at the Office of the Accountant-General of the Federation, Bawa Mokwa.
Ogunjimi, who spoke in Abuja during a courtesy visit by a World Bank delegation led by Mrs Treed Lane, stressed that Nigeria expects timely processing of funding requests, given that the facilities are loans and not grants.
He said, “If approvals take more than six months, the Nigerian Government may no longer honour such arrangements,” highlighting concerns over bureaucratic delays in accessing development financing.
The AGF noted that as a responsible borrower, Nigeria should not be subjected to prolonged approval processes that could affect project execution timelines and broader development objectives. He therefore urged the World Bank to “expedite the approval and disbursement of project funds to Nigeria” to support the country’s priorities.
Ogunjimi emphasised that the loans carry repayment obligations, making it imperative that disbursement processes align with project schedules and fiscal planning frameworks.
However, the Senior External Affairs Officer at the World Bank, Mansir Nasir, earlier said that funds for projects financed by the institution were not disbursed at once but in instalments, depending on the nature of the project and financing instruments.
Nigeria’s debt to the World Bank rose by $2.08bn in one year to $19.89 billion as of December 31, 2025, according to an analysis of external debt stock data released by the Debt Management Office.
The figure represents an 11.7 per cent increase from the $17.81 billion owed to the global lender as of December 31, 2024. The World Bank debt comprises loans from the International Development Association and the International Bank for Reconstruction and Development.
IDA provides concessional grants and loans to low-income countries, while IBRD provides financial products and policy advice mainly to middle-income and creditworthy developing countries.
DMO data showed that Nigeria’s IDA debt rose from $16.56 billion in 2024 to $18.51 billion in 2025, an increase of $1.94 billion or 11.73 per cent. IBRD exposure also increased from $1.24 billion to $1.38 billion, representing an increase of $141.84 million or 11.41 per cent.
The increase means World Bank loans accounted for 38.36 per cent of Nigeria’s total external debt stock of $51.86 billion as of the end of 2025.
The proposed loan is aligned with the World Bank’s Country Partnership Framework and forms part of a broader package of interventions, including FINCLUDE, BRIDGE, AGROW, ARMOR, and DARES programmes.
According to the bank, the facility is expected to drive growth through multiple channels, including reduced food and input costs, improved agricultural productivity, expansion of digital services, deeper financial markets, increased private investment, improved electricity access, and stronger tax revenue mobilisation.
“The $1.25 billion standalone operation builds on recent progress in restoring stability and underpins the Government’s shift toward an inclusive growth model,” the document stated.
Implementation of the programme will be coordinated by the Federal Ministry of Finance, working with key agencies including the Central Bank of Nigeria, Securities and Exchange Commission, National Agricultural Seed Council, Nigerian Electricity Regulatory Commission, and the Ministry of Power.
However, it warned that the operation carries significant risks. “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.
The PUNCH