Nigeria’s Federal Government is in advanced talks with World Bank over a fresh $1.25bn loan package, which would become the second-largest single World Bank facility approved under Bola Tinubu if cleared next month.
According to a report by Punch Newspapers, the proposed financing, titled Nigeria Actions for Investment and Jobs Acceleration, is scheduled for presentation to the World Bank board on June 26, 2026. The facility is intended to support reforms aimed at boosting job creation, investment and competitiveness.
At the current exchange rate of about N1,361.4 to the dollar, the loan would add roughly N1.70tn to Nigeria’s debt stock. If fully approved and disbursed, external debt could rise from N74.43tn ($51.86bn) recorded at the end of 2025 to at least N76.13tn ($53.11bn), while total public debt could climb to N160.98tn.
The World Bank’s Programme Information Document shows the loan has moved into the lender’s decision meeting stage, a late phase in its internal approval cycle. This indicates appraisal and negotiations are largely complete before final board consideration.
The lender said the facility would help expand access to finance, electricity and digital services, while also supporting tax, trade and agricultural reforms. It described the programme as part of Nigeria’s broader economic reform agenda.
The loan would push total World Bank approvals to Nigeria under Tinubu’s administration to about $10.6bn, according to Punch. Previous approvals since June 2023 cover sectors including education, health, agriculture, social protection and renewable energy.
Debt concerns grow
Economists have raised concerns about Nigeria’s rising borrowing despite government claims of improved revenue after the fuel subsidy removal.
Adewale Abimbola said concessional loans are not inherently harmful if invested in projects that generate long-term growth and revenue.
Aliyu Ilias questioned why the government was increasing debt despite reporting stronger income after economic reforms.
Muda Yusuf warned that foreign loans expose Nigeria to exchange rate risks and could worsen fiscal vulnerability if revenue generation remains weak.
The Nigerian Economic Summit Group also warned in its latest debt report that Nigeria remains in a high-risk fiscal environment. It said while some indicators suggest temporary stability, underlying debt pressure remains elevated.
The group noted that public debt-to-GDP rose to 40.6 per cent in 2024 and that debt burden remained volatile through 2025, reflecting what it called persistent structural weakness.
Election timing flagged
The World Bank itself acknowledged political risks around the loan. In its internal document, it warned that the approach of the 2027 election could affect implementation of sensitive reforms.
The proposed board consideration comes around six months before Nigeria’s January 16, 2027 presidential election, according to the timetable released by Independent National Electoral Commission.
The World Bank stated that political and governance risks are high, warning that election pressures may delay or reverse planned reforms.
