The federal government has opened discussions with the World Bank for three new loan facilities totalling $1.5 billion, even as Nigeria’s public debt stock climbed to a record N166.79tn at the end of June 2026.
Documents obtained from the multilateral lender show that the proposed financing comprises three separate $500m facilities targeting climate resilience, social protection, and early childhood development.
The most immediate proposal is a $500m additional financing facility for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL.
The World Bank has set October 29, 2026, as the target date for board consideration. The borrower is the Federal Republic of Nigeria, while Balarabe Abbas Lawal’s Environment Minister ministry serves as the implementing agency.
The transaction would expand the ACReSAL project’s overall funding from $700m to $1.2bn, financed entirely through the International Development Association, the World Bank’s concessional lending arm.
According to bank records, the government requested the additional $500m to scale up operational results and strengthen the institutional arrangements required to sustain integrated landscape management.
The additional capital will fund landscape restoration, watershed rehabilitation, flood management, irrigation systems, reforestation, and related interventions. ACReSAL currently operates across 19 northern states and the Federal Capital Territory to combat land degradation, climate vulnerability, and declining agricultural yield.
The World Bank estimates that desertification affects 43 percent of Nigeria’s total land area, warning that unaddressed climate change could reduce annual gross domestic product by 2.6 per cent by 2030 and up to 6.7 per cent by 2050.
The second proposed facility involves a $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project, designated as HOPE-SP. The project remains in an earlier preparation stage, with a technical design review scheduled for October 30, 2026, and a tentative approval date set for March 16, 2027.
The HOPE-SP initiative carries an estimated total cost of $500m, comprising a $420m results-based program and an $80m investment project financing component. The program aims to establish regular social assistance for poor and vulnerable households while gradually shifting funding responsibilities to federal and state budgets through strengthened local delivery systems.
Planned interventions under HOPE-SP include targeted conditional and unconditional cash transfers, social registry updates, integration of the National Identification Number into social security databases, and administrative capacity building.
World Bank metrics highlight that Nigeria spent 0.14 percent of GDP on social safety nets in 2021, compared to a global average of 1.5 percent and a lower-middle-income peer average of 1.2 per cent.
The lender noted that household welfare has deteriorated significantly due to pandemic disruptions, inflation, natural disasters, and regional conflict, while fuel subsidy removals and exchange-rate reforms created short-term cost-of-living pressures.
The third $500m facility supports the Nigeria Early Childhood Development programme, scheduled for board consideration on March 15, 2027, following its October 30, 2026 technical review. Finance Minister Wale Edun’s ministry is listed as the borrower, while Budget and Economic Planning Minister Atiku Bagudu’s ministry will handle implementation across all 36 states and the FCT.
The early childhood program combines a $400m programme-for-results component with $100m in investment project financing from the IDA. It targets children aged zero to five with health, nutrition, early learning, childcare, and sanitation services.
The World Bank noted that 40 percent of Nigerian children under five suffer from stunting, fewer than half are developmentally on track, and only 36 percent of children aged 36 to 59 months attend organised early learning programs.
Data from the Debt Management Office reveals that total public debt grew by N14.39tn over 12 months, rising from N152.40 tn in June 2025 to N166.79tn by June 2026. This reflects a 9.44 percent year-on-year increase in local currency terms.
In US dollar terms, total public debt rose 21.35 percent, expanding from $99.66bn to $120.93bn over the same period. The variance between local and dollar growth rates stems from exchange-rate valuation effects.
The DMO applied an official conversion rate of N1,379.18/$ in June 2026, compared to N1,529.21/$ a year earlier. Consequently, dollar-denominated obligations grew at a faster percentage pace than their naira equivalents. On a quarter-on-quarter basis, total debt grew by N7.44tn, or 4.67 per cent, from N159.35tn in March 2026.
Domestic liabilities expanded by N11.04tn year-on-year from N80.55tn in June 2025, climbing 26.07 per cent in dollar terms from $52.67bn to $66.41bn. Between March and June 2026, domestic debt rose by N4.19tn. External liabilities reached $54.52bn in June 2026, up $7.54bn from $46.98bn in June 2025.
Growth within domestic obligations was heavily driven by Treasury bills. Federal Government domestic debt reached N87tn in June 2026, up 13.60 per cent from N76.59tn in June 2025. FGN bonds comprised the largest share at N64.84tn (74.53 per cent of domestic debt), including N41.47tn in conventional naira bonds, N22.11tn in securitised Ways and Means advances, and N1.27tn in domestic dollar bonds.
Outstanding Nigerian Treasury Bills recorded the sharpest expansion, jumping 52.64 per cent year-on-year from N12.76tn to N19.48tn. This increased Treasury bills’ share of domestic federal debt from 16.67 per cent to 22.39 per cent.
During the second quarter of 2026 alone, Treasury bills grew by N2.92tn. Conversely, securitised Ways and Means balances dropped by N613.34bn during the second quarter to N22.11tn, while promissory notes fell 29.81 per cent year-on-year to N1.22tn.
The proposed $1.5bn facilities would further expand Nigeria’s reliance on multilateral funding. Total debt owed to the World Bank Group stood at $20.73bn at the end of June 2026, comprising $19.12bn in IDA credits and $1.61bn in International Bank for Reconstruction and Development loans. This combined exposure increased by $1.34bn, or 6.93 per cent, from $19.39bn in June 2025.
The World Bank Group accounts for 38 per cent of Nigeria’s total $54.52bn external debt, with the IDA acting as the single largest individual external creditor at 35 per cent of the total portfolio. World Bank obligations also represent 84 per cent of Nigeria’s $24.76bn overall multilateral debt stock.
The creditor mix has shifted over the past year. Multilateral institutions held 49.36 per cent of external debt in June 2025 compared to 45.42 per cent in June 2026, despite nominal increases. This shift reflects faster growth in commercial borrowing, where Eurobond liabilities rose from $17.32bn to $18.55bn, alongside new syndicated loans.
The expanding debt stock has drawn political criticism. Former Vice-President Atiku Abubakar called for a full reconciliation of public debt, including new borrowings, Treasury bills, and debt-service charges.
Speaking through African Democratic Congress Presidential Campaign Council Strategic Communications Director Phrank Shaibu, Atiku urged the President Bola Tinubu administration to clarify the breakdown between reclassified older debt, exchange-rate adjustments, and newly contracted loans. He also questioned rising debt-servicing costs, arguing that fiscal allocations for development and public services were being constrained.
Defending multilateral borrowing, Lagos-based economist Adewale Abimbola noted that World Bank facilities carry concessionary interest rates below commercial market levels alongside longer repayment tenors. ‘If it’s concessionary and tied to viable projects with medium-term revenue prospects, I don’t think it’s a bad idea,’ Abimbola said. ‘Borrowing isn’t bad; what matters is utilisation.’ He emphasised that the economic return depends entirely on effective project execution to support long-term revenue growth and public service delivery.