The Federal Government is moving closer to securing a fresh $1.25bn loan from the World Bank to support economic reforms, improve competitiveness, and stimulate job creation.

Findings showed that the proposed facility, known as the Nigeria Actions for Investment and Jobs Acceleration programme, has entered a crucial stage in the World Bank’s approval process and is expected to be presented for final approval on June 26, 2026.

The approval date falls roughly six months before the January 16, 2027 presidential election, according to the revised timetable released by the Independent National Electoral Commission.

If approved, the loan would become the second-largest World Bank facility obtained under President Bola Tinubu, behind the $1.5bn Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.

At the current exchange rate of N1,361.4 to one dollar, the proposed facility is valued at approximately N1.70tn, highlighting the scale of foreign financing being pursued by the government amid ongoing economic reforms.

Should the loan be fully approved and disbursed, Nigeria’s external debt would rise from N74.43tn ($51.86bn) recorded as of December 31, 2025, to at least N76.13tn ($53.11bn). The country’s total public debt would also increase from N159.28tn to about N160.98tn.

In dollar terms, Nigeria’s overall public debt could rise from $110.97bn to around $112.22bn.

Documents obtained from the World Bank revealed that the project has advanced beyond the concept and appraisal stages and is now at the “decision meeting” phase of the institution’s project cycle.

This stage typically means that negotiations and major policy agreements between the borrower and the World Bank team have largely been concluded, with the project awaiting final consideration by the Board of Executive Directors.

According to the World Bank document, “The review did authorise the team to appraise and negotiate,” indicating that the proposed facility had already passed earlier internal assessments.

The Federal Republic of Nigeria is listed as the borrower, while the Federal Ministry of Finance will serve as the implementing agency.

The World Bank said the facility is intended to support government efforts to improve access to finance, digital services, and electricity, while also strengthening competitiveness through reforms in taxation, trade, and agriculture.

The latest move comes as scrutiny grows over Nigeria’s increasing dependence on multilateral borrowing under Tinubu’s administration.

Between June 2023 and May 2026, the World Bank approved approximately $9.35bn in loans and credits for Nigeria across sectors including power, education, agriculture, healthcare, renewable energy, social protection, and economic reform support.

Some of the major approvals include the $2.25bn RESET and ARMOR reform financing package in June 2024, $1.57bn for the HOPE and SPIN programmes in September 2024, and another $1.08bn for education and resilience projects approved in March 2025.

If the fresh $1.25bn facility receives final approval, total World Bank commitments to Nigeria under Tinubu could rise to about $10.6bn.

However, analysts noted that many approved loans are not released immediately, as disbursements are often tied to the implementation of specific reforms and policy conditions.

Meanwhile, the Accountant-General of the Federation, Shamseldeen Ogunjimi, recently warned that Nigeria could reconsider future World Bank loans if delays in approval and disbursement continue.

Speaking during a meeting in Abuja with a World Bank delegation led by Treed Lane, Ogunjimi stressed that Nigeria expected timely processing of loan requests since the facilities were repayable loans and not grants.

According to him, prolonged delays could disrupt project execution and affect broader development goals.

The World Bank’s Senior External Affairs Officer, Mansir Nasir, had earlier explained that project financing from the institution is usually released in phases depending on project performance and financing arrangements.

Data from the Debt Management Office also showed that Nigeria’s debt to the World Bank rose by $2.08bn within one year to reach $19.89bn as of December 31, 2025.

The debt includes obligations owed to both the International Development Association and the International Bank for Reconstruction and Development.

According to the figures, World Bank loans accounted for 38.36 per cent of Nigeria’s total external debt stock of $51.86bn by the end of 2025.

The proposed facility forms part of broader World Bank intervention programmes such as FINCLUDE, BRIDGE, AGROW, ARMOR, and DARES.

The bank stated that the loan is expected to stimulate economic growth by lowering food and input costs, boosting agricultural productivity, improving electricity access, expanding digital services, attracting private investment, and strengthening tax revenue mobilisation.

It added that the programme builds on recent efforts to stabilise the economy and supports the government’s broader push toward inclusive growth.

Implementation will involve several agencies, including the Central Bank of Nigeria, Securities and Exchange Commission, Nigerian Electricity Regulatory Commission, the National Agricultural Seed Council, and the Ministry of Power.

Despite the expected benefits, the World Bank warned that the programme carries significant risks, particularly ahead of the 2027 elections.

According to the bank, political and governance pressures could delay or reverse sensitive reforms linked to the programme.

Economic experts have also expressed mixed views over Nigeria’s growing debt profile.

Lagos-based economist Adewale Abimbola argued that concessional loans from multilateral institutions are not necessarily harmful if they are tied to productive projects capable of generating long-term growth and revenue.

He stressed that the key issue is how effectively the borrowed funds are utilised.

Development economist Aliyu Ilias, however, questioned the need for additional borrowing despite government claims of increased revenue following the removal of fuel subsidy.

Similarly, Muda Yusuf warned that Nigeria must ensure debt sustainability by improving its revenue base and carefully managing repayment obligations.

He cautioned that excessive foreign borrowing could increase pressure on the naira and external reserves.

Meanwhile, the Nigerian Economic Summit Group said Nigeria’s debt outlook remains fragile despite signs of temporary improvement in some indicators.

In its latest Debt Burden Monitor report, the group noted that although Nigeria’s Debt Burden Index dropped to 70.9 points in 2024 from 83.6 points in 2023, underlying fiscal vulnerabilities remain significant.

According to the NESG, public debt-to-GDP rose to 40.6 per cent in 2024, reflecting continued reliance on borrowing amid weak revenue generation.

The group warned that Nigeria remains in a high-risk fiscal environment and has yet to make a decisive transition toward long-term debt sustainability.