FG seeks fresh $1.5bn World Bank loan as debt hits N166.79tn

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FG seeks fresh $1.5bn World Bank loan as debt hits N166.79tn

Published on

September 28, 2026

Gong

World Bank headquarters as Nigeria seeks approval for a new $1.25bn loan to support economic reforms and job creation.

The Federal Government is seeking three new World Bank loans worth a combined $1.5bn as Nigeria’s public debt rose to N166.79tn by the end of June 2026.

According to documents obtained by The PUNCH, the proposed facilities comprise three separate $500m International Development Association credits for climate resilience, social protection and early childhood development.

The first facility is an additional $500m for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL. The World Bank is expected to consider the facility on October 29, 2026.

The additional funding would increase ACReSAL’s total financing from $700m to $1.2bn and support landscape restoration, watershed rehabilitation, erosion and flood management, irrigation, drainage, water harvesting, reforestation and other climate-resilience measures.

ACReSAL currently operates in 19 northern states and the Federal Capital Territory.

The second proposed $500m facility is for the Household Prosperity and Empowerment-Social Protection Project, or HOPE-SP. The programme is designed to provide regular social assistance to poor and vulnerable households, including targeted cash transfers and improvements to Nigeria’s social registry.

The proposed project also seeks to integrate National Identification Numbers into the social protection information system and strengthen implementation at federal, state and local government levels.

The third $500m facility would fund the Nigeria Early Childhood Development programme. The project is expected to cover all 36 states and the FCT, focusing on health, nutrition, early learning, childcare, water and sanitation for children aged zero to five.

Nigeria’s debt rises

The proposed borrowing comes after the Debt Management Office reported that Nigeria’s total public debt increased from N152.40tn in June 2025 to N166.79tn in June 2026, representing a N14.39tn or 9.44 per cent rise. The DMO published the latest debt figures on September 25, 2026.

In dollar terms, total public debt rose from $99.66bn to $120.93bn over the same period. Domestic debt stood at N91.59tn, while external debt was N75.20tn at the end of June.

Federal Government domestic debt increased to N87tn, with Treasury bills recording a significant rise. Outstanding Treasury bills climbed from N12.76tn in June 2025 to N19.48tn in June 2026.

World Bank exposure

Nigeria’s debt to the World Bank Group also increased during the period. According to figures cited by The PUNCH, Nigeria owed the World Bank Group $20.73bn at the end of June 2026, including $19.12bn to the International Development Association and $1.61bn to the International Bank for Reconstruction and Development.

The proposed facilities would therefore come against a backdrop of rising overall public debt and increased borrowing from multilateral institutions.

Economist Adewale Abimbola told The PUNCH that World Bank loans are generally concessionary, with lower interest rates and longer repayment periods than many market-based loans.

He said the impact of such borrowing would depend on how effectively the funds are structured and deployed towards projects capable of supporting growth, improving public services and strengthening revenue.

The latest proposals remain subject to the World Bank’s review and approval processes. The dates cited for the HOPE-SP and Early Childhood Development programmes are March 2027, while the additional ACReSAL financing is scheduled for consideration in October 2026.

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