The Federal Government has opened discussions with the World Bank for three new loans totalling $1.5 billion, even as Nigeria’s public debt rose to N166.79 trillion at the end of June 2026.
Documents from the World Bank show that the proposed facilities comprise three separate $500 million loans targeting climate resilience, social protection and early childhood development.
The first facility is an additional $500 million financing for the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) project. The World Bank is expected to consider the proposal on October 29, 2026.
The additional financing would increase ACReSAL’s total funding from $700 million to $1.2 billion. The project is financed through the International Development Association (IDA), the World Bank’s concessional lending arm.
The proposed financing will support landscape restoration, watershed rehabilitation, erosion and flood management, irrigation, drainage, water harvesting, reforestation and other climate-resilience measures.
Of the $500 million, $310 million is proposed for dryland management, $165 million for community climate resilience and $25 million for institutional strengthening and project management.
ACReSAL currently operates across 19 northern states and the Federal Capital Territory.
Social protection programme
The second proposed facility is a $500 million IDA credit for the Household Prosperity and Empowerment-Social Protection (HOPE-SP) project.
The project is designed to provide regular social assistance to poor and vulnerable households while gradually increasing the role of federal and state governments in financing social protection programmes.
The proposed facility includes $420 million for a results-based programme and $80 million for investment project financing.
The programme would support targeted cash transfers, modernisation of the social registry, integration of the National Identification Number into the social protection information system and stronger implementation at federal, state and local government levels.
The World Bank is expected to conduct the project’s technical design review on October 30, 2026, with approval tentatively scheduled for March 16, 2027.
$500m early childhood development loan
The third proposed facility is another $500 million for the Nigeria Early Childhood Development programme, with approval tentatively scheduled for March 15, 2027.
The programme would cover all 36 states and the FCT, focusing on children aged zero to five.
It is expected to support access to healthcare, nutrition, early learning, childcare, water and sanitation and other essential services.
The facility would comprise $400 million in programme-for-results financing and $100 million in investment project financing, both from IDA.
Nigeria’s debt rises
The proposed borrowing comes against the backdrop of a significant increase in Nigeria’s public debt.
According to figures from the Debt Management Office, total public debt rose by N14.39 trillion, from N152.40 trillion in June 2025 to N166.79 trillion in June 2026.
This represents a 9.44 per cent year-on-year increase.
In dollar terms, total public debt rose from $99.66 billion to $120.93 billion, an increase of $21.27 billion or 21.35 per cent.
Domestic debt stood at N91.59 trillion, representing 54.91 per cent of total public debt, while external debt stood at N75.20 trillion, accounting for 45.09 per cent.
The Federal Government accounted for the bulk of the liabilities, with domestic debt of N87 trillion and external liabilities of N65.77 trillion.
Treasury bills drive domestic borrowing
Federal Government domestic debt increased from N76.59 trillion in June 2025 to N87 trillion in June 2026.
Treasury bills recorded one of the sharpest increases, rising from N12.76 trillion to N19.48 trillion during the period, representing a 52.64 per cent increase.
FGN bonds remained the largest component of domestic debt at N64.84 trillion.
World Bank exposure reaches $20.73bn
Nigeria’s outstanding obligations to the World Bank Group stood at $20.73 billion at the end of June 2026.
The figure comprised $19.12 billion owed to IDA and $1.61 billion to the International Bank for Reconstruction and Development.
The World Bank Group accounted for about 38 per cent of Nigeria’s $54.52 billion external debt at the end of June.
Nigeria’s total multilateral external debt stood at $24.76 billion, while commercial debt reached $23.16 billion.
Eurobond obligations accounted for $18.55 billion of the commercial debt, while bilateral debt stood at $6.61 billion.
Economist explains borrowing implications
Economist Adewale Abimbola said multilateral loans from institutions such as the World Bank are generally concessional, with relatively lower interest rates and longer repayment periods.
He said the key issue was how borrowed funds were structured and utilised.
“Borrowing isn’t bad; what matters is utilisation,” he said, stressing that the economic impact would depend on whether the funds were directed towards projects capable of supporting sustainable growth, improving public services and strengthening government revenue.