Nigeria’s search for economic recovery is increasingly being tied to one pressing question: how much borrowing will it take to reverse decades of infrastructure decay, weak productivity, unemployment and fiscal instability?
The latest indication of the Federal Government’s strategy emerged with ongoing talks between Nigeria and the World Bank over a fresh $1.25 billion loan aimed at supporting economic reforms, investment growth, and job creation.
According to details obtained from a World Bank Programme Information Document, the proposed facility, titled Nigeria Actions for Investment and Jobs Acceleration has advanced to a critical stage in the lender’s approval process and is expected to be presented for approval on June 26, 2026.
If approved, the facility would become the second-largest single World Bank loan secured under the administration of Bola Tinubu, behind the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
At the prevailing exchange rate of N1,361.4 to the dollar, the proposed loan translates to approximately N1.70 trillion, highlighting the scale of external financing Nigeria continues to pursue amid difficult economic reforms.
The World Bank says the proposed funding is intended to expand access to finance, electricity and digital services while strengthening competitiveness through reforms in taxation, trade and agriculture.
Yet the development has intensified scrutiny over Nigeria’s rising debt profile and growing dependence on multilateral institutions for economic survival.
If given the green light for disbursement, the new loan would increase Nigeria’s external debt from N74.43 trillion ($51.86 billion) recorded as of December 31, 2025, to at least N76.13 trillion ($53.11 billion).
Meanwhile, the country’s total public debt would also rise from N159.28 trillion to roughly N160.98 trillion, while total debt in dollar terms could climb from $110.97 billion to approximately $112.22 billion.
The figures underline the dilemma facing policymakers: borrowing remains necessary to fund critical reforms and infrastructure, yet rising debt obligations continue to place pressure on public finances.
Since Tinubu assumed office in May 2023, the World Bank has approved about $9.35 billion in loans and credits for Nigeria, according to available data. By May 2026, Nigeria’s total World Bank exposure had exceeded $16.4 billion.
The country’s debt to the lender consists mainly of financing from the International Development Association and the International Bank for Reconstruction and Development.
While the IDA provides concessional loans and grants to low-income countries, the IBRD offers financing and policy support to middle-income and developing economies considered creditworthy.
Recall that Nigeria continues to battle high inflation, weak industrial output, unstable electricity supply, unemployment and a depreciating currency, despite years of heavy borrowing from both domestic and international sources.
Supporters of the government’s reform agenda insist that large-scale financing is unavoidable if Nigeria hopes to modernise infrastructure, improve electricity access, deepen digital connectivity and stimulate investment.
Critics, however, warn that continued borrowing without corresponding growth in productivity and revenue generation could deepen fiscal vulnerabilities and burden future generations with unsustainable repayment obligations.
