The Federal Government is advancing plans to secure a fresh $1.25bn loan facility from the World Bank in what could become the second-largest loan obtained under the administration of President Bola Ahmed Tinubu.
The proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration, is said to have reached an advanced stage in the World Bank’s approval process and is expected to be presented before the institution’s board on June 26, 2026.
At the prevailing exchange rate of N1,361.4 to the dollar, the facility is estimated at about N1.70tn, underscoring the scale of financing being pursued by the Federal Government as it continues to implement fiscal and monetary reforms aimed at stabilising the economy.
Findings from documents contained in a World Bank Programme Information Document indicated that the loan has progressed beyond the concept and appraisal stages, signalling intensified discussions between Nigerian authorities and the global lender ahead of final approval.
If approved, the facility would rank behind only the $1.5bn Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing secured by the Tinubu administration in June 2024.
The latest move has, however, renewed concerns over Nigeria’s rising debt profile and increasing dependence on external borrowing to fund economic reforms, support investment programmes, and stimulate job creation.
Analysts warn that the planned borrowing comes at a time Nigerians are already grappling with inflation, worsening living conditions, and the harsh effects of ongoing economic reforms, including subsidy removal and exchange rate liberalisation.
The timing of the expected approval is also politically significant, coming about six months and 21 days before Nigeria’s next presidential election scheduled for January 16, 2027, according to the revised timetable released by the Independent National Electoral Commission.
Should the loan eventually receive approval and be fully disbursed, Nigeria’s external debt stock is projected to rise from N74.43tn, equivalent to $51.86bn as of December 31, 2025, to at least N76.13tn or about $53.11bn.
Similarly, the country’s total public debt profile could increase from N159.28tn to approximately N160.98tn. In dollar terms, Nigeria’s public debt may climb from $110.97bn to about $112.22bn.
The proposed facility is expected to support reforms targeted at improving competitiveness, attracting private sector investment, and creating jobs across key sectors of the economy.
Meanwhile, concerns over Nigeria’s growing reliance on loans under the current administration were further heightened following remarks by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, who warned that the government could reconsider World Bank loan arrangements if delays in approval and disbursement persist.
Speaking during a courtesy visit by a World Bank delegation led by Mrs. Treed Lane in Abuja last Friday, Ogunjimi stressed that Nigeria expected quicker processing of loan facilities since such funds were repayable and not grants.
“If approvals take more than six months, the Nigerian Government may no longer honour such arrangements,” he said.
He further noted that prolonged approval timelines could undermine project execution and frustrate broader national development objectives.
The development is expected to reignite debate over the sustainability of Nigeria’s borrowing strategy and the long-term implications for public finance management as debt servicing obligations continue to rise.
