FG seeks fresh $1bn World Bank loan

FG seeks fresh $1bn World Bank loan

Nigeria has formally requested a $1 billion loan from the World Bank under a new programme aimed at accelerating private investment, job creation, and economic diversification. The initiative, titled Nigeria Actions for Investment and Jobs Acceleration (P512892), falls within the Bank’s Development Policy Financing (DPF) framework and is scheduled for board review on December 16, 2025.

Loan Structure and Debt Concerns The proposed facility comprises $500 million in International Development Association (IDA) credit and $500 million from the International Bank for Reconstruction and Development (IBRD). If approved, it would mark Nigeria’s second-largest loan under President Bola Tinubu, following the $1.5 billion RESET programme secured in June 2024.

However, the move has sparked debate among analysts, who warn of a potential debt trap if repayment strategies are not clearly defined. As of June 2025, Nigeria’s external debt stood at $46.98 billion, with the World Bank Group accounting for $19.39 billion—41.3% of the total—making it Nigeria’s largest creditor.

Reform-Driven Growth Agenda According to the World Bank, the new operation is designed to shift Nigeria from short-term macroeconomic stabilisation to long-term, private-sector-led growth. Key reform targets include:

• Expanding access to credit
• Strengthening digital financial systems
• Boosting productivity in agricultural value chains
• Deepening capital markets
• Easing inflationary pressures
• Promoting export diversification

The loan will also support the implementation of the Investment and Securities Act 2025, operationalisation of credit-enhancement facilities, and a new Central Bank of Nigeria rulebook focused on consumer protection and risk-based regulation.

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Digital and Trade Reforms Digital transformation is a central pillar of the programme, with backing for the National Digital Economy and E-Governance Bill 2025. This legislation aims to formalise electronic transactions, authentication services, and data governance.

To reduce production and living costs, the World Bank recommends reforms to Nigeria’s trade regime, including:

• AfCFTA tariff concessions
• Simplified import procedures
• Streamlined certification for strategic crops like maize, rice, and soybeans

These measures are expected to lower food inflation and enhance export competitiveness.

Complementary Programmes and Impact The $1 billion loan will be implemented alongside three complementary World Bank initiatives—FINCLUDE, BRIDGE, and AGROW—focused on inclusive finance, digital infrastructure, and sustainable agriculture.

The Bank projects that the combined reforms will:

• Create jobs
• Lower living costs
• Expand credit access for MSMEs
• Improve agricultural productivity
• Raise rural incomes
• Strengthen food security

Progress and Challenges The report commended Nigeria’s recent reforms, including the removal of fuel subsidies, forex unification, and improved revenue administration, noting their role in stabilising the economy and restoring investor confidence.

Nonetheless, challenges persist. Nigeria’s per-capita income remains below pre-2015 levels, and over 130 million citizens still live in poverty. The new facility aims to bridge this gap by unlocking inclusive, private-sector-driven development.

FG seeks fresh $1bn World Bank loan