FG, World Bank in Talks Over Fresh $1.25bn Loan Ahead of 2027 Election
The Federal Government has intensified discussions with the World Bank over a proposed $1.25bn loan aimed at supporting economic reforms, investment growth, and job creation in Nigeria.
According to documents obtained from the World Bank, the proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration, has advanced to a key stage in the lender’s approval process.
The loan is expected to be presented for approval on June 26, 2026, just months before Nigeria’s 2027 presidential election.
If approved, the facility will become the second-largest World Bank loan secured under President Bola Tinubu’s administration, behind the $1.5bn reform financing approved in 2024.
At the current exchange rate, the proposed loan is valued at about N1.70tn, highlighting the scale of external financing being pursued by the Federal Government amid ongoing economic reforms.
Nigeria’s external debt could rise from $51.86bn to over $53bn if the loan is fully approved and disbursed. The country’s total public debt may also increase beyond $112bn.
Loan enters advanced approval stage
Documents from the World Bank showed that the project has moved beyond its concept and appraisal phases and is now at the decision meeting stage.
At this level, the World Bank reviews the final appraisal package before forwarding the project to its Board of Executive Directors for final approval.
The World Bank noted that the programme is designed to support Nigeria’s efforts to improve:
- Access to finance
- Digital services
- Electricity supply
- Agricultural reforms
- Tax and trade competitiveness
The Federal Ministry of Finance will coordinate implementation alongside agencies including the Central Bank of Nigeria, Securities and Exchange Commission, Ministry of Power, and the Nigerian Electricity Regulatory Commission.
Tinubu government increases World Bank borrowing
Since 2023, the World Bank has approved more than $9bn in loans and credits for Nigeria across sectors such as education, healthcare, power, social protection, agriculture, and economic reforms.
If the new facility is approved, total World Bank approvals under Tinubu’s administration could exceed $10.6bn.
However, many of the loans are disbursed gradually because releases are tied to policy reforms and performance conditions.
FG warns over loan approval delays
The Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, recently warned that Nigeria could reconsider future World Bank loans if approval and disbursement delays continue.
Speaking during a meeting with a World Bank delegation in Abuja, Ogunjimi stressed that Nigeria expects faster processing because the facilities are loans and not grants.
He warned that long approval timelines could affect government projects and fiscal planning.
Meanwhile, World Bank official Mansir Nasir explained that funds are usually released in phases depending on the structure of each project.
Economists raise debt concerns
Economic experts have continued to express concerns over Nigeria’s rising debt profile and increasing reliance on external borrowing.
Economist Adewale Abimbola said borrowing itself is not necessarily a problem if the funds are invested in productive sectors capable of generating long-term revenue and growth.
However, development economist Dr Aliyu Ilias questioned why the government continues to borrow heavily despite reporting higher revenues after fuel subsidy removal.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, also warned that excessive foreign borrowing could place additional pressure on the naira and foreign reserves.
According to him, Nigeria must focus on debt sustainability and ensure that borrowed funds are used for projects capable of supporting repayment capacity.
NESG warns debt outlook remains fragile
The Nigerian Economic Summit Group also raised concerns about the country’s debt situation in its latest Debt Burden Monitor report.
The group stated that although some debt indicators appeared to improve in 2024, Nigeria’s fiscal outlook remained fragile due to persistent borrowing and weak revenue growth.
According to the NESG, Nigeria’s debt pressure remained high throughout 2025, warning that continued borrowing without structural reforms could worsen fiscal risks.
The report added that political pressure ahead of the 2027 elections could also affect the implementation of sensitive economic reforms tied to the World Bank facility.
Nigeria’s proposed $1.25bn World Bank loan highlights the Federal Government’s continued push for economic reforms and investment-driven growth. However, rising concerns over debt sustainability, foreign borrowing, and political risks ahead of the 2027 elections continue to generate debate among economists and financial analysts.