Nigeria Eyes $1.25bn Loan from World Bank, Second-Largest in History 

The Nigerian government is negotiating a $1.25 billion loan with the World Bank. This loan will help create jobs, improve access to finance, and support sectors like agriculture and electricity.

Titled “Nigeria Actions for Investment and Jobs Acceleration”, the loan is set for approval by the World Bank Board on June 26, 2026. It comes just months before Nigeria’s 2027 presidential election.

Loan Status

Nigeria and the World Bank have agreed on the key terms and reforms. The loan has passed the concept and appraisal stages and is now under final review. If the board approves it, this loan will be the second-largest secured under President Bola Tinubu’s leadership, after the $1.5 billion RESET loan in 2024.

Debt Impact

As of December 2025, Nigeria’s external debt totaled N74.43 trillion ($51.86 billion). If approved, this new loan would push external debt to N76.13 trillion ($53.11 billion).

 Total public debt, which currently stands at N159.28 trillion, would rise to N160.98 trillion.

Nigeria’s World Bank Exposure

In 2025, Nigeria’s debt to the World Bank grew by 11.7%, from $17.81 billion to $19.89 billion. This debt now accounts for 38% of Nigeria’s total external debt. Since June 2023, the World Bank has approved $9.35 billion in loans to Nigeria. 

If the new loan is approved, Nigeria’s World Bank financing will exceed $10 billion under Tinubu.

Concerns Over Loan Delays

Nigeria’s Accountant-General Shamseldeen Ogunjimi has warned that the government may reject loans if approval and disbursement take longer than six months. Delays, he explained, disrupt fiscal planning and project timelines.

The World Bank clarified that it disburses funds in installments based on the loan’s type and structure, not in lump sums.

Expert Opinions

Adewale Abimbola, an economist, argues that borrowing isn’t inherently bad. World Bank loans have low interest rates and long repayment periods, making them affordable.

However, Aliyu Ilias, a development economist, questions the need for more debt. He believes the government should justify borrowing, especially with increased revenue from fuel subsidy removal.

Muda Yusuf, another economist, warned that Nigeria should avoid borrowing simply to service existing debt.

 The weakening naira raises the cost of repaying foreign loans, which puts further strain on Nigeria’s finances.

Debt Outlook: Rising Pressures

Although Nigeria’s debt indicators have shown short-term improvement, the country’s debt burden remains fragile. 

The Nigerian Economic Summit Group (NESG) warns that Nigeria’s debt-to-GDP ratio is still high. They expect pressure to rise again.

The World Bank has flagged high risks tied to political pressures before the 2027 elections, which could delay or reverse necessary reforms.

Economists agree that Nigeria must urgently implement fiscal reforms to avoid a cycle of borrowing to manage existing debts.