The Federal Government is in talks with the World Bank over three proposed loans worth a combined $1.5bn, even as Nigeria’s total public debt reached a record N166.79tn by the end of June 2026.
The proposed facilities consist of three separate $500m credits targeted at climate resilience, social protection and early childhood development, according to World Bank documents.
The first facility is a proposed $500m additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL. The World Bank has scheduled October 29, 2026, as the estimated date for consideration of the financing by its board.
The Federal Republic of Nigeria is listed as the borrower, while the Federal Ministry of Environment will implement the project.
If approved, the additional financing will increase ACReSAL’s total funding from $700m to $1.2bn, with the entire amount provided through the International Development Association, the World Bank’s concessional financing arm.
The World Bank document said, “The Government of Nigeria has requested AF of $500m to scale up demonstrated project results and strengthen the institutional, operational and financing arrangements needed to sustain integrated landscape management.”
The additional funding is expected to support land restoration, watershed rehabilitation, erosion and flood control, irrigation and drainage systems, water harvesting and storage, reforestation and other measures aimed at improving climate resilience.
Of the proposed $500m, $310m would go towards dryland management, $165m to community climate resilience and $25m to institutional strengthening and project management.
ACReSAL currently covers 19 northern states and the Federal Capital Territory, with its activities focused on challenges such as land degradation, water insecurity, climate vulnerability and declining agricultural productivity.
The World Bank estimated that desertification and land degradation affect about 43 per cent of Nigeria’s land area. It also warned that inadequate action on climate change could reduce the country’s GDP by about 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050.
HOPE-SP loan
The second proposed $500m facility is an IDA credit for the Household Prosperity and Empowerment-Social Protection Project, known as HOPE-SP.
The project is still at an earlier preparation stage, with its technical design review scheduled for October 30, 2026. The World Bank has tentatively set March 16, 2027, for consideration of the loan.
The Federal Ministry of Finance is listed as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction is expected to oversee implementation.
The project would comprise a $420m results-based programme and an $80m investment project financing component, with both components expected to be financed by IDA.
The proposed programme is designed to provide regular social assistance to poor and vulnerable households while gradually increasing the contribution of federal and state governments to social protection financing.
The World Bank said the programme would establish “a sustainable social assistance to poor and vulnerable households, financed increasingly from federal and state budgets and delivered through strengthened state and local government systems.”
The facility would support targeted unconditional and conditional cash transfers, upgrade the national social registry, incorporate the National Identification Number into the social protection information system and improve implementation across federal, state and local government levels.
The lender noted that Nigeria spent only 0.14 per cent of its GDP on social safety-net programmes in 2021, compared with a global average of 1.5 per cent and 1.2 per cent among lower-middle-income countries.
The World Bank also estimated that the proportion of Nigerians living in poverty rose from 40 per cent in 2019 to 56 per cent in 2023 and could reach 62.5 per cent in 2026.
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It attributed the deterioration to factors such as the COVID-19 pandemic, inflation, natural disasters and conflict, while noting that the removal of fuel subsidies and exchange-rate reforms increased living costs in the short term.
Early childhood development
The third proposed $500m loan is for the Nigeria Early Childhood Development programme, with March 15, 2027, set as its estimated approval date.
Its technical design review is also scheduled for October 30, 2026.
The Federal Ministry of Finance would borrow the funds, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The initiative would cover all 36 states and the FCT and focus on children aged zero to five.
It is designed to improve access to healthcare, nutrition, early learning, childcare, water and sanitation and other essential services.
The $500m IDA credit would comprise $400m for a programme-for-results component and $100m for investment project financing.
Explaining the need for the programme, the World Bank said, “40 percent of children under five are stunted, fewer than half are developmentally on track, 36 percent of children aged 36 to 59 months attend organised early learning,” with rural and poor households bearing a significant share of the burden.
Nigeria’s debt rises
The proposed World Bank borrowing comes against the backdrop of a significant increase in Nigeria’s public debt.
Data from the Debt Management Office showed that total public debt increased by N14.39tn from N152.40tn in June 2025 to N166.79tn in June 2026, representing a 9.44 per cent year-on-year increase.
In dollar terms, the increase was larger, rising from $99.66bn to $120.93bn, a growth of $21.27bn or 21.35 per cent.
The difference was partly linked to the exchange rate used to convert external debt into naira. The DMO used N1,379.1842/$ in June 2026, compared with N1,529.2105/$ in June 2025.
On a quarterly basis, total public debt rose by N7.44tn, or 4.67 per cent, from N159.35tn in March 2026 to N166.79tn in June.
Domestic debt stood at N91.59tn, representing 54.91 per cent of the total, while external debt was N75.20tn, accounting for 45.09 per cent.
Domestic debt increased by N11.04tn, or 13.70 per cent, from N80.55tn in June 2025.
The Federal Government accounted for the bulk of the debt, with domestic liabilities of N87tn. States and the FCT owed N4.59tn domestically.
On the external side, the Federal Government owed N65.77tn, while states and the FCT accounted for N9.42tn.
Treasury bills expand
A major driver of the increase in Federal Government domestic borrowing was Treasury bills.
FGN domestic debt rose from N76.59tn in June 2025 to N87tn in June 2026, representing an increase of N10.41tn or 13.60 per cent.
FGN bonds remained the largest component at N64.84tn, representing 74.53 per cent of Federal Government domestic debt.
However, outstanding Nigerian Treasury Bills increased from N12.76tn to N19.48tn within the year, a rise of N6.72tn or 52.64 per cent.
Their share of Federal Government domestic debt consequently increased from 16.67 per cent to 22.39 per cent.
Treasury bills also rose by N2.92tn between March and June 2026, increasing from N16.57tn to N19.48tn.
Conventional FGN naira bonds rose by N4.94tn year-on-year to N41.47tn and increased by N2tn between March and June.
Meanwhile, the securitised Ways and Means balance fell from N22.72tn in March to N22.11tn in June, while promissory notes declined from N1.73tn in June 2025 to N1.22tn in June 2026.
World Bank exposure
Nigeria’s outstanding debt to the World Bank Group reached $20.73bn at the end of June 2026.
Of that amount, $19.12bn was owed to IDA, while $1.61bn was owed to the International Bank for Reconstruction and Development.
The combined figure increased by $1.34bn, or 6.93 per cent, from $19.39bn recorded in June 2025.
The World Bank Group’s exposure represented about 38 per cent of Nigeria’s $54.52bn external debt at the end of June.
IDA alone accounted for roughly 35 per cent of Nigeria’s external debt, making it the country’s largest identified external creditor.
Nigeria’s total multilateral debt stood at $24.76bn, representing 45.42 per cent of external debt.
Commercial debt stood at $23.16bn, while bilateral debt was $6.61bn. Eurobonds accounted for $18.55bn of the commercial obligations.
China remained Nigeria’s largest bilateral creditor, with $4.91bn owed to the Export-Import Bank of China and another $573.53m to the China Development Bank.
Atiku demands debt reconciliation
The latest debt figures have also drawn criticism from former Vice-President Atiku Abubakar, who called for a comprehensive reconciliation of Nigeria’s public debt.
The PUNCH had reported that Atiku sought clarification on new borrowings, Treasury Bills and charges contained in recent external debt-service records.
In a statement issued on Saturday by Phrank Shaibu, Director of Strategic Communications of the African Democratic Congress Presidential Campaign Council, Atiku also called for an apology from the President Bola Tinubu administration over the economic hardship Nigerians have experienced since the removal of the petrol subsidy and other reforms introduced in 2023.
“A government that says more money is coming in must explain why it keeps borrowing and why the people paying for its policies cannot see the promised gains,” Atiku said.
He urged the government to “identify the old debt newly recorded, the foreign debt whose naira value rose with the exchange rate, and every new loan contracted since he assumed office.”
Atiku also questioned the cost of servicing the country’s debt, arguing that rising obligations were reducing funds available for public services and development.
Commenting on the proposed World Bank loans, Lagos-based economist Adewale Abimbola said multilateral loans such as those from the World Bank are generally concessionary, with lower interest rates and longer repayment periods than many commercial loans.
He said the focus should be on how borrowed funds are structured and used.
“If it’s concessionary and tied to viable projects with medium-term revenue prospects, I don’t think it’s a bad idea,” Abimbola explained. “Borrowing isn’t bad; what matters is utilisation.”
He added that the effect of the loans on the economy would ultimately depend on whether the funds are directed towards projects capable of supporting sustainable growth, improving government revenue and strengthening public services.