Nigeria Nears Approval for Fresh $1.25bn World Bank Loan as Debt Concerns Mount

The Federal Government is advancing discussions with the World Bank over a proposed $1.25bn loan aimed at supporting economic reforms, investment growth and job creation, amid increasing scrutiny of Nigeria’s rising debt profile.

Findings indicate that the proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration, has reached a critical phase within the World Bank’s approval process and is scheduled to be presented to the institution’s Board of Executive Directors for consideration on June 26, 2026.

If approved, the loan would become one of the largest single financing facilities secured by the administration of President Bola Tinubu, second only to the $1.5bn economic stabilisation financing approved by the World Bank in June 2024.

At the current exchange rate of about N1,361.4 to the dollar, the proposed facility is valued at roughly N1.70tn, underscoring the scale of external borrowing being pursued by the Federal Government as it implements wide-ranging economic reforms.

According to project documents reviewed by journalists, the facility has progressed beyond the concept and appraisal stages and is now at the “decision meeting” stage of the World Bank project cycle.

This stage typically means that negotiations and policy agreements between the borrower and the lender have largely been concluded, leaving only final management clearance and board approval before disbursement can proceed.

The World Bank document reportedly stated that the review had “authorised the team to appraise and negotiate,” indicating that the proposal had successfully passed major internal assessments.

The borrower is listed as the Federal Republic of Nigeria, while the Federal Ministry of Finance is expected to oversee implementation of the programme.

According to the World Bank, the loan is designed to support reforms aimed at expanding access to finance, electricity and digital services while also improving competitiveness through reforms in taxation, agriculture and trade.

The proposed borrowing comes at a time when Nigeria’s growing dependence on multilateral financing has become a subject of public debate.

Data reviewed by analysts show that the World Bank has approved approximately $9.35bn in loans and credits for Nigeria between June 2023 and May 2026.

These facilities span several sectors including power, education, healthcare, renewable energy, agriculture, economic reforms and social protection programmes.

If the new $1.25bn loan is approved, total World Bank financing approvals secured under Tinubu’s administration would rise to about $10.6bn.

Debt figures released by the Debt Management Office showed that Nigeria’s external debt stood at N74.43tn, or $51.86bn, as of December 31, 2025.

Approval and full disbursement of the proposed facility would push the country’s external debt to approximately N76.13tn, while total public debt could climb above N160tn.

The Accountant-General of the Federation, Shamseldeen Ogunjimi, recently warned that Nigeria might reject future World Bank facilities if delays in approval and disbursement continue to affect project timelines.

Speaking during a meeting with a World Bank delegation in Abuja, Ogunjimi stressed that the facilities are loans requiring repayment and should therefore be processed more efficiently.

However, the World Bank maintained that project funds are usually disbursed in phases based on agreed reform benchmarks and project implementation milestones.

Economic analysts say while multilateral loans often provide relatively lower interest rates and longer repayment periods compared to commercial borrowing, the growing size of Nigeria’s debt obligations continues to raise concerns about fiscal sustainability and future repayment pressures.

The proposed facility also comes less than a year before campaigns intensify ahead of the 2027 general elections, adding a political dimension to discussions around government spending, reforms and borrowing.