By Sofiat Adenekan-Abdul
The Federal Government is moving closer to securing a fresh $1.25 billion loan from the World Bank as efforts intensify to support ongoing economic reforms, stimulate job creation, and improve Nigeria’s business competitiveness.
The proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration, has advanced to a critical stage in the lender’s approval process and is scheduled for presentation before the World Bank Board on June 26, 2026.
The planned approval comes about six months before Nigeria’s January 16, 2027 presidential election timetable released by the Independent National Electoral Commission.
If approved, the loan would become the second-largest single financing package obtained from the World Bank under President Bola Tinubu, following the $1.5 billion development policy financing approved in June 2024.
At the current exchange rate of ₦1,361.4 to the dollar, the proposed facility is valued at approximately ₦1.70 trillion, highlighting the scale of external financing being deployed to sustain Nigeria’s reform agenda amid economic pressures.
Debt Profile Set to Rise
Nigeria’s external debt could rise from ₦74.43 trillion ($51.86 billion) recorded as of December 31, 2025, to about ₦76.13 trillion ($53.11 billion) if the loan is fully approved and disbursed.
Similarly, the country’s total public debt stock may increase from ₦159.28 trillion to approximately ₦160.98 trillion, equivalent to about $112.22 billion.
According to the World Bank’s Programme Information Document, the project has successfully moved beyond the concept and appraisal phases and is currently at the “decision meeting” stage — a near-final internal review process where financing terms, policy reforms, and implementation commitments are substantially agreed before board approval.
The document stated that the review “authorised the team to appraise and negotiate,” indicating that the project has passed major internal assessments.
Focus on Reforms and Competitiveness
The Federal Ministry of Finance has been designated as the implementing agency for the programme, while the borrower is listed as the Federal Republic of Nigeria.
The World Bank said the facility is expected to improve access to finance, digital infrastructure, and electricity, while also strengthening competitiveness through reforms in taxation, trade, and agriculture.
The proposed borrowing comes amid growing debate over Nigeria’s increasing dependence on multilateral financing institutions.
Between June 2023 and May 2026, the World Bank approved about $9.35 billion in loans and credits for Nigeria across key sectors including power, healthcare, agriculture, education, and social protection.
Approval of the new facility would push total World Bank commitments to Nigeria under the current administration to about $10.6 billion, reinforcing the lender’s role as one of the country’s largest external financiers.
Concerns Over Delayed Disbursement
Despite the expanding financing pipeline, government officials have raised concerns about delays associated with loan approvals and disbursements.
The Accountant-General of the Federation, Shamseldeen Ogunjimi, warned that prolonged approval timelines could affect fiscal planning and project execution.
Speaking during a meeting in Abuja with a World Bank delegation led by Treed Lane, Ogunjimi stressed that the facilities are repayable loans rather than grants and urged the institution to speed up processing timelines.
Responding on behalf of the World Bank, Mansir Nasir explained that loan disbursements are usually released in tranches tied to project milestones and financing arrangements, rather than as one-off payments.
Nigeria’s Exposure to World Bank Growing
Figures from the Debt Management Office Nigeria show that Nigeria’s debt exposure to the World Bank increased by $2.08 billion to $19.89 billion as of December 31, 2025 — an 11.7 per cent rise compared to the previous year.
The World Bank portfolio for Nigeria includes support from the International Development Association and the International Bank for Reconstruction and Development, which provide concessional financing, development support, and policy advisory services.
As the $1.25 billion facility moves closer to final approval, it underscores both Nigeria’s ambitious reform drive and its growing reliance on external funding to sustain economic recovery and development initiatives.
