The Federal Government is pushing to secure a fresh $1.25bn loan from the World Bank to finance economic reforms, expand investment, and stimulate job creation, even as concerns mount over Nigeria’s growing debt exposure ahead of the 2027 presidential election.
Documents reviewed by Abuja Politico show that the proposed facility—titled Nigeria Actions for Investment and Jobs Acceleration—has entered a critical phase of the lender’s approval process and is scheduled to go before the World Bank’s Board of Executive Directors on 26 June 2026.
If approved, the package would become the second-largest single World Bank facility secured under the administration of Bola Ahmed Tinubu, behind only the $1.5bn economic stabilisation financing approved in June 2024.
At the official exchange rate of N1,361.4 to the dollar, the proposed facility amounts to roughly N1.7tn — underscoring the scale of external borrowing being pursued as the government grapples with inflation, sluggish growth and mounting fiscal pressures.
The additional borrowing would raise Nigeria’s external debt stock from N74.43tn ($51.86bn) at the end of December 2025 to about N76.13tn ($53.11bn), while total public debt could climb from N159.28tn to at least N160.98tn. In dollar terms, Nigeria’s overall public debt would rise to an estimated $112.22bn if the funds are fully disbursed.
World Bank programme documents indicate that the operation has moved beyond the concept and appraisal stages and is now at the lender’s “decision meeting” phase — an internal clearance point that typically signals that negotiations and key reform conditions have largely been concluded.
“The review did authorise the team to appraise and negotiate,” the bank stated in its programme information document, suggesting the project is progressing towards final approval.
The Federal Ministry of Finance is expected to oversee implementation of the programme, which the World Bank said is intended to “expand access to finance, digital, and electricity services, and strengthen competitiveness through tax, trade, and agriculture reforms”.
The latest move adds to Nigeria’s growing dependence on multilateral financing under Tinubu’s reform agenda. Between June 2023 and May 2026, the World Bank approved approximately $9.35bn in loans and credits for Nigeria across sectors including healthcare, power, agriculture, education, social protection and economic reform support.
Those approvals included the $2.25bn RESET and ARMOR reform financing packages in 2024, $1.57bn for the HOPE and SPIN programmes later that year, and a further $1.08bn for education and resilience initiatives approved in March 2025.
Should the new facility receive final approval next month, total World Bank commitments under Tinubu would rise to around $10.6bn, further cementing the lender’s role as a central financier of Nigeria’s economic restructuring efforts.
Yet concerns persist over both the pace of disbursement and the long-term sustainability of the country’s debt profile.
Last week, the Accountant-General of the Federation, Shamseldeen Ogunjimi, warned that Nigeria could begin rejecting World Bank loans if approval timelines remain excessively slow.
Speaking in Abuja during a meeting with a World Bank delegation led by Treed Lane, Ogunjimi argued that prolonged bureaucratic processes risk undermining project delivery and fiscal planning.
“If approvals take more than six months, the Nigerian Government may no longer honour such arrangements,” he said, stressing that the facilities were loans requiring repayment, not grants.
The World Bank’s Senior External Affairs Officer, Mansir Nasir, had earlier clarified that project financing from the institution is typically released in phases tied to specific reform benchmarks and implementation targets.
Debt figures released by the Debt Management Office show that Nigeria’s obligations to the World Bank rose by $2.08bn in a single year, reaching $19.89bn as of December 2025 — an increase of 11.7 per cent from the previous year.
Most of the increase came from concessional loans provided through the International Development Association, which rose from $16.56bn in 2024 to $18.51bn in 2025. Exposure to the International Bank for Reconstruction and Development also increased to $1.38bn.
The figures mean World Bank loans now account for more than 38 per cent of Nigeria’s total external debt stock.
The proposed facility forms part of a broader World Bank-backed reform architecture that includes programmes such as FINCLUDE, BRIDGE, AGROW, ARMOR and DARES. According to the lender, the initiative is expected to support agricultural productivity, deepen financial inclusion, expand electricity access, improve tax collection and encourage private sector investment.
“The $1.25bn standalone operation builds on recent progress in restoring stability and underpins the Government’s shift toward an inclusive growth model,” the bank said.
Implementation is expected to involve multiple agencies, including the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Electricity Regulatory Commission and the Ministry of Power.
But the World Bank also acknowledged the political risks surrounding the operation, warning that Nigeria’s approach to the 2027 election cycle could complicate reform implementation.
“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 document stated.
Economists remain divided over the government’s expanding borrowing programme.
Lagos-based economist Adewale Abimbola argued that concessional multilateral loans were not inherently problematic if channelled into productive sectors capable of generating long-term returns.
“Borrowing isn’t bad; what matters is utilisation,” he said, adding that the central issue was whether the projects financed could strengthen growth and future revenues.
But development economist Aliyu Ilias questioned why the government continued to accumulate debt despite claims that the removal of fuel subsidies had significantly increased public revenues.
Meanwhile, Muda Yusuf warned that Nigeria risked entering a cycle in which new loans were increasingly required to service existing obligations.
He cautioned that foreign-denominated borrowing exposed the country to exchange-rate shocks and could intensify pressure on external reserves if export earnings and revenue growth failed to keep pace.
Fresh concerns were also raised this week by the Nigerian Economic Summit Group, which warned in its latest Debt Burden Monitor report that Nigeria remained trapped in a “high-risk fiscal environment” despite signs of temporary stabilisation.
The NESG noted that while the country’s Debt Burden Index fell from 83.6 points in 2023 to 70.9 points in 2024, the improvement reflected temporary moderation in debt servicing pressures rather than a fundamental strengthening of fiscal capacity.
Public debt-to-GDP, it said, climbed to 40.6 per cent in 2024 as the government continued to rely heavily on borrowing to finance deficits amid weak revenue generation.
The group added that debt pressures remained volatile throughout 2025, warning that beneath the headline figures, structural fiscal vulnerabilities remained unresolved.
