The Federal Government is in advanced discussions with the World Bank for a $1.25bn loan to support economic reforms, job creation and competitiveness, with the facility set for board approval on June 26, 2026 — making it the second-largest single World Bank loan secured under President Bola Tinubu.
The proposed loan, titled Nigeria Actions for Investment and Jobs Acceleration, has reached the decision meeting stage of the World Bank’s project cycle, a near-final internal clearance after which the project proceeds to the Board of Executive Directors for formal approval.
The review has already authorised the team to appraise and negotiate, indicating that key policy actions, financing terms and reform commitments have been substantially agreed between Nigeria and the lender.
At an exchange rate of N1,361.4 to the dollar, the facility translates to approximately N1.70tn.
If approved and fully disbursed, it would raise Nigeria’s external debt from N74.43tn to at least N76.13tn, and push total public debt from N159.28tn to at least N160.98tn.
Only the $1.5bn Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing, approved in June 2024, ranks higher among World Bank facilities under the Tinubu administration.
The World Bank described the loan as designed to expand access to finance, digital and electricity services while strengthening competitiveness through tax, trade and agricultural reforms.
The Federal Ministry of Finance will serve as the implementing agency, coordinating with the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Electricity Regulatory Commission and other key agencies.
If approved, total World Bank lending to Nigeria under Tinubu would rise to approximately $10.6bn, spanning power, education, healthcare, agriculture, social protection and economic reform support.
Nigeria’s debt to the World Bank already rose by $2.08bn in one year to $19.89bn as of December 2025, accounting for 38.36 per cent of the country’s total external debt stock.
The Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, has warned that Nigeria may reject World Bank facilities if approval and disbursement delays persist, saying prolonged timelines undermine the country’s willingness to proceed with such arrangements.
He urged the lender to expedite processing, noting that the loans carry repayment obligations and must align with project schedules and fiscal planning.
The World Bank itself cautioned that the operation carries significant risks, warning that political and governance pressures ahead of the 2027 elections could delay or reverse sensitive reforms.
Economists are divided on the borrowing trajectory. Lagos-based economist Adewale Abimbola argued that concessionary loans tied to viable projects are not inherently problematic, saying the critical question is whether the funds are deployed effectively.
Development economist Aliyu Ilias, however, questioned the rationale for additional debt at a time when the government claims higher post-subsidy revenues.
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Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, stressed that debt sustainability hinges on the country’s revenue capacity to service obligations, warning that excessive foreign borrowing risks putting pressure on reserves and weakening the exchange rate.
The Nigerian Economic Summit Group added a broader note of caution in its Debt Burden Monitor report, warning that Nigeria’s debt outlook remains fragile despite surface-level improvements.
The group noted that while the country’s Debt Burden Index declined from 83.6 points in 2023 to 70.9 in 2024, the improvement was driven by a temporary moderation in debt service pressures rather than genuine fiscal strengthening.
The index remained volatile throughout 2025, ending the year at an estimated 79.2 points, leading the group to conclude that Nigeria has not yet made a decisive shift toward debt sustainability.
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