The Federal Government is advancing talks with the World Bank over a proposed $1.25bn loan designed to support economic reforms, job creation, and investment growth in Nigeria.
According to information obtained from the World Bank, the proposed financing package has reached an advanced approval stage and could be presented for final consideration on June 26, 2026.
The facility, known as Nigeria Actions for Investment and Jobs Acceleration, is expected to strengthen Nigeria’s reform agenda by improving access to electricity, digital services, agricultural productivity, and private sector financing.
If approved, the loan would become one of the largest World Bank facilities secured under President Bola Tinubu’s administration.
Nigeria’s debt may rise further
The fresh World Bank loan could increase Nigeria’s external debt profile significantly.
Current data from the Debt Management Office showed that Nigeria’s external debt stood at $51.86bn as of December 2025. Approval of the new facility could push the figure above $53bn.
Nigeria’s total public debt may also rise beyond $112bn if the loan is fully disbursed.
At the current exchange rate, the proposed facility is valued at about N1.70tn.
World Bank pushes economic reforms
The World Bank explained that the programme is aimed at supporting reforms capable of improving economic competitiveness and long-term growth.
According to the lender, the loan will focus on:
- Expanding electricity access
- Improving digital infrastructure
- Supporting agriculture reforms
- Boosting financial inclusion
- Strengthening tax and trade systems
- Encouraging private investment
The Federal Ministry of Finance will coordinate the implementation process with support from agencies including the Central Bank of Nigeria and the Nigerian Electricity Regulatory Commission.
Economists express mixed reactions
Economic experts have continued to debate Nigeria’s growing dependence on foreign loans.
Some analysts believe concessionary loans from institutions like the World Bank can support economic development if the funds are properly managed and invested in productive sectors.
Others warned that increasing borrowing without stronger revenue generation may create long-term fiscal challenges.
Development economist Dr Aliyu Ilias questioned why the government continues to seek more loans despite increased revenues following fuel subsidy removal.
Meanwhile, economist Dr Muda Yusuf warned that excessive foreign borrowing could place additional pressure on the naira and Nigeria’s foreign reserves.
FG warns against delays
The Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, recently urged the World Bank to speed up approval and disbursement processes for development projects.
He warned that delays in processing loans could affect project timelines and weaken the government’s willingness to continue with some financing arrangements.
World Bank officials, however, explained that project funds are usually released in phases depending on agreed reforms and implementation conditions.
Debt concerns remain high
The Nigerian Economic Summit Group recently warned that Nigeria’s debt outlook remains fragile despite slight improvements in some debt indicators.
According to the group, continued borrowing without significant revenue growth could worsen fiscal pressure in the coming years.
The organisation also warned that political activities ahead of the 2027 general election could affect the implementation of key reforms linked to the proposed loan programme.
Nigeria’s latest move to secure a fresh $1.25bn World Bank loan highlights the government’s push for economic reforms and investment-driven growth. However, concerns over rising debt, fiscal sustainability, and political risks continue to dominate discussions among economists and financial experts.
