Nigeria Secures Fresh $1.25bn World Bank Loan Amidst Debt Concerns

The World Bank has recently sanctioned a new $1.25 billion credit facility for Nigeria, designated under its 'Nigeria Actions for Investment and Jobs Acceleration programme.' This approval comes at a time of significant public apprehension regarding the nation's escalating debt burden and persistent calls for the Federal Government to curb its foreign borrowings.

This development was officially announced by the World Bank in a statement released on Wednesday, coinciding with the launch of a new Country Partnership Framework (CPF) for Nigeria, spanning the years 2026 to 2032. The bank specified that this framework would guide its support for Nigeria over the next six years, with a primary focus on stimulating job creation through private sector-led economic expansion. The statement highlighted, “The World Bank Group has endorsed a new Country Partnership Framework for Nigeria spanning 2026–2032, setting out a strategy to create more and better jobs at scale by unlocking private sector-led growth.” It further added that the bank had “also approved the Nigeria Actions for Investment and Jobs Acceleration Development Policy Financing operation, which supports Nigeria’s transition toward a more inclusive growth model that spurs growth and creates jobs.”

This latest approval follows weeks of public criticism that emerged after reports indicated the Federal Government's intention to seek an additional $1.25 billion World Bank facility aimed at bolstering economic reforms, employment generation, and national competitiveness. Many Nigerians had argued that the country’s ever-increasing external debt had yet to translate into tangible improvements in their living standards.

According to the World Bank, the new Country Partnership Framework builds upon Nigeria's recent macroeconomic reforms, which it claims have resulted in stronger economic growth, higher government revenues, increased external reserves, and improved investor confidence. The framework outlines ambitious objectives, including expanding electricity access to 32 million Nigerians, providing broadband connectivity to 58 million people, enhancing health and nutrition services for 40 million citizens, and offering support to 9.5 million farmers. It also seeks to strengthen human capital, boost agricultural productivity, and broaden access to energy and digital infrastructure.

Mathew Verghis, the World Bank Country Director for Nigeria, affirmed the institution's commitment to assisting Nigeria in converting its recent macroeconomic achievements into better living conditions for its citizens. He stated, “Our new Country Partnership Framework provides the strategy for how the World Bank Group will support Nigeria over the coming years, with a strong focus on helping to create more and better jobs, particularly by enabling private sector-led growth. The recent macroeconomic gains have been critical to help stabilise the economy. Translating improved macroeconomic conditions into better living standards will require addressing the structural constraints to spur private sector investment and job creation.”

The $1.25 billion Development Policy Financing operation is specifically designed to support reforms aimed at boosting Nigeria's competitiveness and establishing conditions conducive to sustainable growth. The World Bank's statement detailed these reforms, which include deepening capital markets, modernizing the regulatory framework for the digital economy and e-governance, advancing power sector reforms to accelerate electrification, reducing trade barriers in line with Nigeria’s commitments under the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (AfCFTA), improving access to quality agricultural seeds, and strengthening domestic revenue mobilization. The statement explicitly mentioned, “The NAIJA DPF operation, which amounts to $1.25bn, supports a set of Government reforms to strengthen the foundations for growth and competitiveness. These include deepening capital markets, modernising the regulatory framework for the digital economy and e-governance, advancing power sector reforms to accelerate electrification, lowering trade barriers in line with Nigeria’s ECOWAS and AfCFTA commitments to help ease price pressures, improving access to quality agricultural seeds, and strengthening domestic revenue mobilisation.”

Dahlia Khalifa, the International Finance Corporation’s Divisional Director for Nigeria, commented that Nigeria's reform agenda has created significant opportunities for attracting greater private investment. She noted, “Nigeria’s long-term growth potential will be shaped by the economy’s ability to attract investment, raise productivity, and unleash private sector job creation, building on the capital of a rapidly growing population.” Similarly, Ed Mountfield, Vice-President and Chief Financial Officer of the Multilateral Investment Guarantee Agency, acknowledged that while Nigeria's reforms have indeed created investment opportunities, certain risks persist for investors. He said, “Nigeria’s reform progress is creating important opportunities for private investment, but risks remain for investors. MIGA’s role is to help manage these risks—through guarantees and political risk insurance—so that investors can step in with confidence.”

This latest approval marks the second-largest single World Bank facility Nigeria has secured under President Bola Tinubu's administration, following the $1.5 billion 'Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing' approved in June 2024. Data from the Debt Management Office (DMO) reveals a substantial increase in Nigeria's debt to the World Bank, which climbed from $17.81 billion at the close of 2024 to $19.89 billion by December 31, 2025. This represents an increase of $2.08 billion, or 11.7 percent. The DMO figures also indicated that loans from the International Development Association (IDA) rose from $16.56 billion to $18.51 billion during this period, while debt owed to the International Bank for Reconstruction and Development (IBRD) increased from $1.24 billion to $1.38 billion. Overall, the World Bank accounted for 38.36 percent of Nigeria’s total external debt stock, which stood at $51.86 billion at the end of 2025.