Nigeria is set to deepen its reliance on multilateral financing as the Federal Government moves to secure a fresh $1.25 billion World Bank facility to support reforms across power, digital infrastructure, taxation, agriculture and financial access, amid rising concerns over debt exposure and execution risks ahead of the 2027 general elections.
Documents obtained by Business A.M. show that the proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration, is being processed under the World Bank’s Development Policy Financing (DPF) framework, with approval targeted for June 26, 2026.
If approved, the new package would raise total World Bank loan approvals secured by Nigeria under President Bola Tinubu’s administration to about $10.6 billion within three years, reinforcing the administration’s strategy of relying heavily on external concessional financing to stabilise the economy and support structural reforms.
The latest request also underscores the government’s urgent search for growth-supporting capital after implementing painful macroeconomic adjustments, including petrol subsidy removal, exchange rate liberalisation and tighter monetary controls, which have stabilised some economic indicators but sharply worsened living costs for households and businesses.
According to the Programme Information Document released by the World Bank, the proposed operation is designed to help Nigeria transition from economic stabilisation to a broader phase of inclusive growth and employment generation.
“The proposed Development Policy Financing (DPF) supports reforms initiated by the Government aimed at pivoting from stabilization to inclusive growth and job creation. The $1.25 billion standalone operation builds on recent progress in restoring stability and underpins the Government’s shift toward an inclusive growth model,” the document stated.
Unlike conventional infrastructure loans tied to specific projects, the DPF instrument is linked to policy and institutional reforms, with disbursements tied to agreed policy actions across key sectors of the economy.
The first component of the programme focuses on expanding access to finance, electricity and digital services.
The package is expected to support implementation of the Investment and Securities Act 2025, operationalisation of credit enhancement mechanisms, expansion of digital governance systems, a new national metering framework and increased private sector participation in interconnected mini-grids.
Despite being Africa’s largest economy by population, Nigeria continues to struggle with chronic electricity shortages, low broadband penetration in rural communities and weak access to affordable financing for small businesses.
The second pillar of the World Bank-backed reforms will target competitiveness through tax, trade and agricultural reforms, including measures aimed at reducing trade barriers, improving seed supply systems, introducing VAT e-invoicing and implementing a minimum effective corporate tax regime.
The reforms align with the government’s ambition to reposition Nigeria as a more attractive destination for domestic and foreign investment amid intensifying competition for capital across emerging markets.
The World Bank acknowledged that the Tinubu administration has already undertaken significant reforms since 2023, including removal of fuel subsidies, unification of multiple exchange rates, ending central bank deficit financing practices and strengthening revenue administration systems.
According to the Bank, those reforms have contributed to improved fiscal revenues, narrower budget deficits, stronger foreign reserves and reduced exchange rate volatility, while also helping to restore a measure of investor confidence.
However, the institution warned that macroeconomic stabilisation has not yet translated into broad-based prosperity for most Nigerians.
“Growth remains modest, per capita income is rising by less than 2%, and 63% of Nigerians, over 139 million people, remained in poverty in 2025,” the document noted.
The Bank further identified structural weaknesses holding back economic transformation, including shallow financial intermediation, weak market competition, low-productivity agriculture, infrastructure deficits and governance inefficiencies.
Although World Bank loans are generally considered cheaper and longer-tenured than commercial borrowing, analysts warn that rising debt service obligations could continue to strain public finances unless reforms generate stronger non-oil revenues and sustained economic growth.
The World Bank itself assessed the overall risk level of the proposed operation as “high,” citing political uncertainty ahead of the 2027 elections, potential reform reversals, oil price vulnerability and inflationary pressures linked to geopolitical tensions in the Middle East.
Additional risks identified include election-related spending pressures, weak inter-agency coordination, fiduciary concerns and possible social backlash from trade and tax reforms.
The timing of the proposed loan is also significant, coming amid increasing scrutiny of Nigeria’s relationship with multilateral lenders and the pace of loan disbursements.
Earlier, Shamseldeen Babatunde Ogunjimi, the Accountant-General of the Federation, warned that Nigeria could reconsider future World Bank borrowing arrangements if delays in approvals and disbursements persist.
Ogunjimi stressed that Nigeria’s requests involved loans rather than grants and argued that the country, as a responsible borrower, deserved faster processing timelines for critical development financing.
According to government officials, prolonged delays in disbursement often disrupt project execution, increase implementation costs and weaken the effectiveness of economic reform programmes tied to external financing.
If approved next month, the proposed $1.25 billion facility would become the second-largest World Bank loan secured by the Tinubu administration after the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
