The Federal Government is seeking fresh loans totalling $1.5 billion from the World Bank as Nigeria’s public debt stock climbed to N166.79 trillion at the end of June 2026.
The proposed facilities, contained in World Bank project documents, are expected to fund programmes focused on climate resilience, social protection and early childhood development.
Each of the three proposed facilities is valued at $500 million and would be financed through the International Development Association (IDA), the World Bank’s concessional lending arm.
The proposed borrowing comes as Nigeria’s outstanding obligations to the World Bank Group rose to $20.73 billion by June 2026, representing about 38 per cent of the country’s total external debt of $54.52 billion.
$500m Climate Resilience Facility
The first proposed facility is an additional $500 million for the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) project.
The World Bank has scheduled October 29, 2026, for its board to consider the additional financing.
The Federal Republic of Nigeria would be the borrower, while the Federal Ministry of Environment would oversee implementation.
If approved, the additional funding would increase total financing for ACReSAL from $700 million to $1.2 billion.
According to the World Bank, the Nigerian government requested the additional financing to expand results already achieved under the programme and strengthen the institutional, operational and financial arrangements required to sustain integrated landscape management.
The proposed funding would support landscape restoration, watershed rehabilitation, erosion and flood management, irrigation and drainage, water harvesting and storage, reforestation and other climate-resilience interventions.
Of the $500 million, about $310 million would be allocated to dryland management, $165 million to community climate resilience and $25 million to institutional strengthening and project management.
ACReSAL currently operates in 19 northern states and the Federal Capital Territory, targeting land degradation, water insecurity, climate vulnerability and declining agricultural productivity.
The World Bank estimates that desertification and land degradation affect about 43 per cent of Nigeria’s land area.
It also projects that inadequate action on climate change could reduce Nigeria’s annual GDP by about 2.6 per cent by 2030 and as much as 6.7 per cent by 2050.
$500m Social Protection Programme
The second proposed facility is a $500 million IDA credit for the Household Prosperity and Empowerment-Social Protection Project, known as HOPE-SP.
The project is still under preparation, with a technical design review scheduled for October 30, 2026. The World Bank has tentatively set March 16, 2027, for board consideration.
The Federal Ministry of Finance would serve as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction would implement the programme.
The proposed financing comprises $420 million for a results-based programme and $80 million for investment project financing.
The project is designed to expand social assistance for poor and vulnerable households while gradually increasing the contribution of federal and state governments to social protection.
It would support targeted unconditional and conditional cash transfers, modernise the national social registry, integrate the National Identification Number into the social protection information system and strengthen capacity at federal, state and local government levels.
The World Bank noted that Nigeria spent only about 0.14 per cent of GDP on social safety-net programmes in 2021, compared with a global average of 1.5 per cent and 1.2 per cent for lower-middle-income countries.
The lender also projected that the share of Nigerians living in poverty could rise to 62.5 per cent in 2026, compared with 56 per cent in 2023 and 40 per cent in 2019.
It attributed the deterioration to the combined effects of the COVID-19 pandemic, inflation, natural disasters and conflict, while noting that fuel subsidy removal and exchange-rate reforms had increased living costs in the short term.
$500m Early Childhood Development Programme
The third proposed facility is another $500 million IDA credit for the Nigeria Early Childhood Development Programme.
The project is expected to undergo technical design review on October 30, 2026, with board consideration tentatively scheduled for March 15, 2027.
The Federal Ministry of Finance would be the borrower, while the Federal Ministry of Budget and Economic Planning would implement the programme.
The initiative would operate across Nigeria’s 36 states and the FCT, focusing on children aged zero to five.
It is expected to expand access to healthcare, nutrition, early learning, childcare, water and sanitation, and other essential services.
The proposed financing consists of $400 million for a programme-for-results component and $100 million for investment project financing.
The World Bank said the programme was being proposed against the backdrop of poor early-childhood outcomes in Nigeria.
According to the lender, about 40 per cent of Nigerian children under five are stunted, fewer than half are developmentally on track and only 36 per cent of children aged between 36 and 59 months participate in organised early learning.
Children from poor and rural households, the bank said, bear a disproportionate share of these challenges.
Nigeria’s Public Debt Rises by N14.39tn
The proposed borrowing comes amid a substantial increase in Nigeria’s overall public debt.
Data from the Debt Management Office show that total public debt increased from N152.40 trillion in June 2025 to N166.79 trillion in June 2026.
The N14.39 trillion increase represents a 9.44 per cent rise over the 12 months.
In dollar terms, total public debt increased from $99.66 billion to $120.93 billion, representing a $21.27 billion, or 21.35 per cent, increase.
The difference between the naira and dollar movements was partly influenced by changes in the exchange rate used to value Nigeria’s external obligations.
The DMO used an exchange rate of N1,379.1842 to the dollar for June 2026, compared with N1,529.2105/$ in June 2025.
Nigeria’s debt stock also increased by N7.44 trillion during the second quarter of 2026, rising from N159.35 trillion in March to N166.79 trillion in June.
Domestic debt accounted for N91.59 trillion, or 54.91 per cent of total public debt, while external debt stood at N75.20 trillion, representing 45.09 per cent.
Domestic debt increased by N11.04 trillion, or 13.70 per cent, from N80.55 trillion in June 2025.
External debt, meanwhile, rose from $46.98 billion in June 2025 to $54.52 billion in June 2026, an increase of $7.54 billion, or 16.05 per cent.
Treasury Bills Drive Domestic Borrowing
The Federal Government’s domestic borrowing increased substantially during the period, driven largely by Treasury bills and conventional naira bonds.
Federal Government domestic debt rose from N76.59 trillion in June 2025 to N87 trillion in June 2026, representing a N10.41 trillion, or 13.60 per cent, increase.
FGN bonds remained the largest component, accounting for N64.84 trillion, or 74.53 per cent, of Federal Government domestic debt.
The figure comprised N41.47 trillion in conventional naira bonds, N22.11 trillion in securitised Ways and Means advances and N1.27 trillion in domestic dollar bonds.
Treasury bills recorded the strongest growth, with outstanding Nigerian Treasury Bills rising from N12.76 trillion to N19.48 trillion within one year.
That represents an increase of N6.72 trillion, or 52.64 per cent.
As a result, Treasury bills increased their share of Federal Government domestic debt from 16.67 per cent to 22.39 per cent.
Between March and June 2026, the Treasury bill stock also increased from N16.57 trillion to N19.48 trillion, representing a N2.92 trillion, or 17.60 per cent, rise.
Conventional FGN naira bonds increased by N4.94 trillion, or 13.54 per cent, year-on-year to N41.47 trillion.
Securitised Ways and Means advances, however, declined from N22.72 trillion in March to N22.11 trillion in June.
Promissory notes also fell from N1.73 trillion in June 2025 to N1.22 trillion in June 2026, representing a 29.81 per cent decline.
FGN Savings Bonds increased by 33.78 per cent over the period, from N91.53 billion to N122.45 billion, although they represented only 0.14 per cent of Federal Government domestic debt.
World Bank Exposure Reaches $20.73bn
If approved and eventually disbursed, the proposed facilities would further increase Nigeria’s exposure to the World Bank.
The DMO reported that Nigeria owed the World Bank Group $20.73 billion as of June 2026.
Of this amount, $19.12 billion was owed to IDA, while $1.61 billion was owed to the International Bank for Reconstruction and Development (IBRD).
The combined World Bank exposure increased by $1.34 billion, or 6.93 per cent, from $19.39 billion in June 2025.
Nigeria’s IDA debt rose from $18.04 billion to $19.12 billion during the period, while its IBRD obligations increased from $1.35 billion to $1.61 billion.
Between March and June 2026, Nigeria’s total World Bank exposure increased by $907.09 million, or 4.58 per cent, from $19.82 billion to $20.73 billion.
IDA debt accounted for the bulk of the increase, rising by $733.08 million during the quarter, while IBRD obligations increased by $174.01 million.
The World Bank Group accounted for about 38 per cent of Nigeria’s total external debt at the end of June.
IDA alone accounted for approximately 35 per cent of the country’s external debt.
Multilateral and Commercial Debt
Nigeria’s total multilateral debt stood at $24.76 billion, representing 45.42 per cent of its external obligations.
Other multilateral creditors included the African Development Bank, to which Nigeria owed $2.17 billion; the African Development Fund, $1.01 billion; the Islamic Development Bank, $406.41 million; and the International Fund for Agricultural Development, $314.98 million.
Commercial borrowing stood at $23.16 billion, accounting for 42.47 per cent of Nigeria’s external debt.
Eurobonds accounted for $18.55 billion of the commercial obligations.
Nigeria also owed $1.87 billion to First Abu Dhabi Bank, $835.78 million to Afreximbank, and had a $1.5 billion First Abu Dhabi Bank total return swap.
Bilateral debt stood at $6.61 billion, representing 12.12 per cent of external obligations.
China remained Nigeria’s largest bilateral creditor, with $4.91 billion owed to the Export-Import Bank of China and another $573.53 million owed to the China Development Bank.
France accounted for a further $906.23 million.
The composition of Nigeria’s external debt has continued to change, with multilateral obligations declining as a share of total external debt from 49.36 per cent in June 2025 to 45.42 per cent in June 2026.
The shift occurred despite an increase in the nominal value of multilateral debt, as commercial borrowing expanded at a faster pace.
Nigeria’s Eurobond obligations also increased from $17.32 billion in June 2025 to $18.55 billion in June 2026, alongside increases in syndicated and other commercial liabilities.
