The loan approval comes amid heightened public scrutiny following reports that the Federal Government, led by Bola Tinubu, was seeking additional financing from the World Bank to support ongoing economic reforms
KaNo —
The World Bank has approved a fresh $1.25bn loan for Nigeria under its Nigeria Actions for Investment and Jobs Acceleration (NAIJA) programme, intensifying debate over the country’s rising debt profile and the effectiveness of external borrowing in improving citizens’ living conditions.
The approval was disclosed in a statement issued on Wednesday alongside the unveiling of a new Country Partnership Framework (CPF) for Nigeria covering 2026 to 2032.
According to the global lender, the framework will guide its engagement with Nigeria over the next six years, with a central focus on job creation through private sector-led growth.
It added that the newly approved Development Policy Financing (DPF) operation would support Nigeria’s transition toward a more inclusive and sustainable growth model.
“The World Bank Group has endorsed a new Country Partnership Framework for Nigeria spanning 2026–2032, setting out a strategy to create more and better jobs at scale by unlocking private sector-led growth,” the statement noted.
The loan approval comes amid heightened public scrutiny following reports that the Federal Government, led by Bola Tinubu, was seeking additional financing from the World Bank to support ongoing economic reforms.
Despite these concerns, the World Bank maintained that Nigeria’s recent macroeconomic reforms have begun to yield positive results.
It cited stronger economic growth, improved government revenues, increased foreign reserves and renewed investor confidence as indicators of progress.
Under the new CPF, the bank outlined ambitious development targets, including expanding electricity access to 32 million Nigerians, providing broadband connectivity to 58 million people, improving health and nutrition services for 40 million citizens and supporting 9.5 million farmers across the country.
The framework also prioritises strengthening human capital development, boosting agricultural productivity and expanding access to critical infrastructure such as energy and digital services.
“Our new Country Partnership Framework provides the strategy for how the World Bank Group will support Nigeria over the coming years, with a strong focus on helping to create more and better jobs, particularly by enabling private sector-led growth,” Verghis said.
He added that while stabilisation efforts have been significant, deeper structural reforms are required to unlock investment and drive job creation.
The $1.25bn DPF operation is expected to support a wide range of reforms designed to strengthen Nigeria’s competitiveness.
These include deepening capital markets, modernising regulatory frameworks for the digital economy and e-governance, advancing power sector reforms to accelerate electrification, and lowering trade barriers in line with Nigeria’s commitments under regional and continental trade agreements.
Other reform areas include improving access to quality agricultural inputs, particularly seeds, and strengthening domestic revenue mobilisation to reduce reliance on external borrowing over time.
The International Finance Corporation’s Divisional Director for Nigeria, Dahlia Khalifa, said Nigeria’s reform agenda presents significant opportunities to attract private investment.
“Nigeria’s long-term growth potential will be shaped by the economy’s ability to attract investment, raise productivity, and unleash private sector job creation, building on the capital of a rapidly growing population,” she said.
Similarly, the Vice-President and Chief Financial Officer of the Multilateral Investment Guarantee Agency, Ed Mountfield, acknowledged that while reforms are creating opportunities, risks remain a concern for investors.
“Nigeria’s reform progress is creating important opportunities for private investment, but risks remain for investors. MIGA’s role is to help manage these risks through guarantees and political risk insurance so that investors can step in with confidence,” he explained.
Data from the Debt Management Office shows that Nigeria’s exposure to the World Bank has continued to rise.
The country’s debt to the institution increased from $17.81bn at the end of 2024 to $19.89bn by December 31, 2025—an increase of $2.08bn or 11.7 per cent.
Overall, the World Bank accounted for 38.36 per cent of Nigeria’s total external debt stock of $51.86bn as of the end of 2025, underscoring its position as the country’s largest multilateral creditor.
However, the continued reliance on external borrowing has drawn criticism from opposition parties and economic analysts.
ADC Questions Federal Government Incessant Borrowing
The African Democratic Congress expressed strong concern over what it described as incessant borrowing by the Federal Government.
In a statement, the party questioned the rationale behind accumulating fresh debt despite worsening economic conditions for many Nigerians.
The ADC urged citizens to critically assess the government’s borrowing strategy, asking why living standards continue to decline even as debt levels rise.
It noted that food prices continue to surge, electricity tariffs are increasing, the naira remains under pressure and businesses are struggling to stay afloat.
The party further lamented rising unemployment, particularly among young people, and warned that inflation and economic hardship are forcing families to cut down on basic necessities.
“Families are cutting down on meals, manufacturers are struggling to survive, and small businesses are collapsing under the weight of inflation and poor economic conditions,” the statement added.
As Nigeria navigates the delicate balance between financing development and managing debt sustainability, the latest World Bank loan underscores both the opportunities and challenges facing Africa’s largest economy.
