morgANABLE politics/Governance
According to the World Bank, the Nigerian government requested the additional funds to scale up existing interventions and strengthen institutional frameworks required for long-term sustainability.
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Nigeria is seeking fresh external financing totalling $1.5bn from the World Bank, even as the country’s public debt climbed to a record N166.79tn as of June 2026, raising renewed concerns about fiscal sustainability and the growing reliance on concessional borrowing.
Documents obtained from the World Bank indicate that the proposed financing package comprises three separate loans of $500m each, targeted at climate resilience, social protection and early childhood development programmes.
The facilities are expected to be funded through the International Development Association, the World Bank’s concessional lending arm for low-income countries.
The most advanced of the three is a $500m additional financing request for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL.
The World Bank has scheduled October 29, 2026, as the tentative date for board consideration of the facility.
The Federal Ministry of Environment is listed as the implementing agency, while the Federal Government is the borrower. If approved, the additional financing would expand the total size of the ACReSAL programme from $700m to $1.2bn.
According to the World Bank, the Nigerian government requested the additional funds to scale up existing interventions and strengthen institutional frameworks required for long-term sustainability.
“The Government of Nigeria has requested additional financing of $500m to scale up demonstrated project results and strengthen the institutional, operational and financing arrangements needed to sustain integrated landscape management,” the document stated.
The ACReSAL programme focuses on tackling land degradation, water scarcity and climate vulnerability across 19 northern states and the Federal Capital Territory.
The additional funding is expected to support landscape restoration, watershed rehabilitation, erosion and flood control, irrigation systems, water harvesting and reforestation initiatives.
A breakdown of the proposed financing shows that $310m would be allocated to dryland management, $165m to community climate resilience projects, and $25m to institutional strengthening and project management.
The World Bank noted that about 43 per cent of Nigeria’s land area is affected by desertification and degradation, warning that failure to address climate change risks could reduce the country’s Gross Domestic Product by 2.6 per cent annually by 2030 and up to 6.7 per cent by 2050.
The second facility under discussion is a $500m credit for the Household Prosperity and Empowerment–Social Protection project, which is still at an early stage of preparation.
The World Bank has scheduled its technical design review for October 30, 2026, while approval is tentatively fixed for March 16, 2027.
The Federal Ministry of Finance is expected to serve as the borrower, with implementation led by the Federal Ministry of Humanitarian Affairs and Poverty Reduction.
The HOPE-SP project is designed to establish a more structured and sustainable social assistance system for poor and vulnerable households across Nigeria.
The programme includes a $420m results-based financing component and an $80m investment project financing component.
According to the World Bank, the initiative aims to expand cash transfer programmes, modernise the national social registry and integrate the National Identification Number into the social protection system to improve targeting and efficiency.
The programme also seeks to gradually shift the funding burden for social safety nets from donor support to federal and state government budgets.
The bank highlighted Nigeria’s relatively low spending on social protection, noting that the country allocated only 0.14 per cent of its GDP to safety-net programmes in 2021, far below the global average of 1.5 per cent and 1.2 per cent for lower-middle-income countries.
It further painted a bleak picture of poverty trends, estimating that the share of Nigerians living below the poverty line rose from 40 per cent in 2019 to 56 per cent in 2023 and could increase to 62.5 per cent by 2026.
The lender attributed the worsening conditions to a combination of factors, including the COVID-19 pandemic, rising inflation, natural disasters and insecurity.
It added that recent economic reforms, such as fuel subsidy removal and exchange-rate unification, had further increased living costs in the short term.
The third proposed loan is a $500m facility for the Nigeria Early Childhood Development programme, with an estimated approval date of March 15, 2027, a day before the expected approval of the HOPE-SP project.
The Federal Ministry of Finance will act as borrower, while implementation will be handled by the Federal Ministry of Budget and Economic Planning.
The programme is expected to cover all 36 states and the Federal Capital Territory and will focus on improving access to integrated services for children aged zero to five years.
These services include healthcare, nutrition, early learning, childcare, water and sanitation.
The financing structure comprises a $400m programme-for-results component and a $100m investment project financing component.
The World Bank said the intervention was necessary due to alarming indicators in child development.
It noted that 40 per cent of children under five in Nigeria are stunted, fewer than half are developmentally on track, and only 36 per cent of children aged between 36 and 59 months attend organised early learning programmes.
The bank added that children from poor rural households bear a disproportionate share of these challenges.
The fresh loan negotiations come amid a steady rise in Nigeria’s public debt, according to the latest figures released by the Debt Management Office.
The data show that total public debt increased by N14.39tn within one year, rising from N152.40tn in June 2025 to N166.79tn in June 2026, representing a 9.44 per cent year-on-year increase.
In dollar terms, the increase was more pronounced, with total debt rising by $21.27bn, or 21.35 per cent, from $99.66bn to $120.93bn over the same period.
The discrepancy between naira and dollar figures reflects the impact of exchange rate movements.
The DMO applied an official exchange rate of N1,379.18 to the dollar for June 2026, compared with N1,529.21 a year earlier, which moderated the naira value of external debt.
On a quarterly basis, public debt rose by N7.44tn, or 4.67 per cent, from N159.35tn in March 2026 to N166.79tn in June. In dollar terms, it increased by $5.98bn, or 5.20 per cent, from $114.95bn.
A breakdown of the debt stock shows that domestic debt remains the larger component, accounting for N91.59tn or 54.91 per cent of total public debt. External debt stood at N75.20tn, representing 45.09 per cent.
Domestic debt rose by N11.04tn, or 13.70 per cent, from N80.55tn in June 2025, while external debt increased by $7.54bn, or 16.05 per cent, from $46.98bn to $54.52bn over the same period.
Despite the rising debt profile, the Federal Government has continued to defend its borrowing strategy, arguing that concessional loans from multilateral institutions such as the World Bank offer favourable terms and are critical for financing development projects and cushioning vulnerable populations.
