FG SEEKS FRESH $1.5BN WORLD BANK LOAN AS DEBT HITS N166.79TN

The Federal Government is seeking three new World Bank loans worth a combined $1.5bn as Nigeria’s total public debt rose to N166.79tn at the end of June 2026.

Documents from the World Bank show that the proposed financing consists of three separate $500m facilities targeting climate resilience, social protection and early childhood development.

The first is an additional $500m for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL. The World Bank is expected to consider the facility on October 29, 2026. If approved, the project’s total financing would increase from $700m to $1.2bn.

The additional funding would support land restoration, watershed rehabilitation, erosion and flood management, irrigation, drainage, water storage, reforestation and other climate-related projects across 19 northern states and the Federal Capital Territory.

The second proposed facility is a $500m credit for the Household Prosperity and Empowerment-Social Protection Project. The programme is designed to provide social assistance to poor and vulnerable households through cash transfers, an improved social registry and stronger social protection systems at federal, state and local government levels.

The World Bank is tentatively expected to consider the facility in March 2027.

The third proposal is another $500m for the Nigeria Early Childhood Development programme, which is also projected for consideration in March 2027.

The programme would cover all 36 states and the FCT and focus on improving access to healthcare, nutrition, early learning, childcare, water and sanitation services for children aged zero to five.

The proposed borrowing comes as Nigeria’s public debt continues to rise. According to the Debt Management Office, total public debt increased from N152.40tn in June 2025 to N166.79tn in June 2026, representing a N14.39tn or 9.44 per cent increase.

Domestic debt stood at N91.59tn, while external debt was N75.20tn. Federal Government domestic debt accounted for N87tn, while states and the FCT owed N4.59tn domestically.

Nigeria’s external debt stood at $54.52bn in June 2026, with the World Bank Group accounting for $20.73bn. Of that amount, $19.12bn was owed to the International Development Association, while $1.61bn was owed to the International Bank for Reconstruction and Development.

Treasury bills were among the major drivers of the increase in Federal Government domestic debt. Outstanding Nigerian Treasury Bills rose from N12.76tn in June 2025 to N19.48tn in June 2026.

The proposed loans have also attracted political scrutiny, with former Vice-President Atiku Abubakar calling for greater transparency over Nigeria’s borrowing and how previous loans have been used.

An economist, Adewale Abimbola, said borrowing from multilateral institutions such as the World Bank can provide financing on relatively favourable terms, but stressed that the impact depends on how effectively the funds are utilised.

The proposed $1.5bn financing remains subject to the World Bank’s approval process and has not yet been disbursed.