TINUBU plans to borrow another $1.5 billion from World Bank

Monday, September 28, 2026 - The Federal Government has opened discussions with the World Bank for three new loans totaling $1.5bn, even as Nigeria’s public debt climbed to a record N166.79tn at the end of June 2026.

Documents obtained from the World Bank show that the proposed financing comprises three separate $500m facilities for climate resilience, social protection and early childhood development.

The most immediate is a proposed $500m additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL. The World Bank has fixed October 29, 2026, as the estimated date for consideration by its board. The borrower is the Federal Republic of Nigeria, while the Federal Ministry of Environment is the implementing agency.

The financing would raise the size of ACReSAL from its previously approved $700m to $1.2bn, entirely financed through the International Development Association, the World Bank’s concessional financing arm.

The 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 financing is expected to support landscape restoration, watershed rehabilitation, erosion and flood management, irrigation and drainage, water harvesting and storage, reforestation and other climate-resilient interventions.

Of the additional $500m, $310m is proposed for dryland management, $165m for community climate resilience and $25m for institutional strengthening and project management.

ACReSAL currently operates across 19 northern states and the Federal Capital Territory and is targeted at land degradation, water insecurity, climate vulnerability and declining agricultural productivity.

The World Bank said desertification and land degradation affected an estimated 43 per cent of Nigeria’s land area, while failure to address climate change could reduce gross domestic product by about 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050.

The second proposed loan is another $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project.

Unlike the ACReSAL facility, the HOPE-SP project is at an earlier stage of preparation. Its technical design review is expected on October 30, 2026, while the World Bank has tentatively fixed March 16, 2027, as its approval date. The Federal Ministry of Finance is listed as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction will implement the programme.

The project has an estimated cost of $500m, comprising a $420m results-based programme and an $80m investment project financing component, with the entire financing expected from IDA.

It is designed to establish regular social assistance for poor and vulnerable households, while gradually shifting financing responsibility towards federal and state budgets.

The World Bank document 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 proposed programme would finance targeted unconditional and conditional cash transfers, modernise the social registry, integrate the National Identification Number into the social protection information system and strengthen implementation at federal, state and local government levels.

The lender said Nigeria spent only 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 among lower-middle-income countries.

The bank also painted a grim picture of household welfare, estimating that the proportion of Nigerians living in poverty had increased from 40 per cent in 2019 to 56 per cent in 2023 and could reach 62.5 per cent in 2026. It attributed the deterioration to several factors, including the pandemic, inflation, natural disasters and conflict, while noting that fuel subsidy removal and exchange-rate reforms worsened living costs in the short term.

The third proposed $500m facility is for the Nigeria Early Childhood Development programme, with an estimated approval date of March 15, 2027, a day before the proposed HOPE-SP approval. Its technical design review is also scheduled for October 30, 2026.

The Federal Ministry of Finance is the borrower, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.

The project would cover all 36 states and the FCT and seek to improve access to an integrated package of health, nutrition, early learning, childcare, water and sanitation, and other services for children aged zero to five.

It would be financed through $500m IDA credit, consisting of a $400m programme-for-results component and $100m investment project financing component.

The World Bank said the intervention had become necessary because “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 poor rural households carrying much of the burden.

The proposed borrowing comes as fresh figures from the Debt Management Office show that Nigeria’s total public debt rose by N14.39tn within one year, from N152.40tn in June 2025 to N166.79tn at the end of June 2026.

That represented an increase of 9.44 per cent year-on-year. Measured in dollars, however, the expansion was considerably larger. Public debt jumped by $21.27bn, or 21.35 per cent, from $99.66bn to $120.93bn over the same period.

The divergence reflects, among other factors, the stronger naira used in valuing the June 2026 external debt. The DMO applied an official exchange rate of N1,379.1842/$ in June 2026 compared with N1,529.2105/$ a year earlier. Consequently, dollar-denominated debt rose much faster than its naira equivalent.

On a quarterly basis, the debt stock increased by N7.44tn, or 4.67 per cent, from N159.35tn in March 2026 to N166.79tn in June.

In dollar terms, it rose by $5.98bn, or 5.20 per cent, from $114.95bn at the end of March. The June figures show that domestic liabilities remained the larger component of the debt portfolio.

Domestic debt stood at N91.59tn, representing 54.91 per cent of total public debt, while external debt amounted to N75.20tn, or 45.09 per cent. Domestic debt increased by N11.04tn, or 13.70 per cent, from N80.55tn in June 2025. In dollar terms, it climbed 26.07 per cent from $52.67bn to $66.41bn.

Between March and June 2026 alone, domestic debt rose by N4.19tn, or 4.79 per cent, from N87.40tn.

External debt moved from $46.98bn in June 2025 to $54.52bn in June 2026, an increase of $7.54bn or 16.05 per cent. Its naira value, however, rose by only N3.35tn or 4.66 per cent, from N71.85tn to N75.20tn because of the exchange-rate effect.

Quarter-on-quarter, external debt increased by $2.62bn or 5.05 per cent from $51.90bn in March to $54.52bn in June. Its naira equivalent increased by N3.25tn or 4.51 per cent.

The Federal Government remained responsible for the overwhelming majority of the portfolio. Its domestic debt stood at N87tn in June, while states and the FCT owed N4.59tn domestically. Federal Government external liabilities were N65.77tn, compared with N9.42tn owed externally by states and the FCT.

Treasury bills

A closer examination of the Federal Government’s domestic liabilities shows that the growth was increasingly driven by Treasury bills and conventional naira bonds.

FGN domestic debt rose from N76.59tn in June 2025 to N87tn in June 2026, an increase of N10.41tn or 13.60 per cent. It also increased by N4.12tn or 4.97 per cent in the second quarter alone.

FGN bonds remained the dominant instrument at N64.84tn, accounting for 74.53 per cent of Federal Government domestic debt. The figure included N41.47tn in conventional naira bonds, N22.11tn in securitised Ways and Means advances and N1.27tn in domestic dollar bonds.

But Treasury bills recorded the sharpest absolute expansion. Outstanding Nigerian Treasury Bills jumped from N12.76tn in June 2025 to N19.48tn in June 2026, an increase of N6.72tn or 52.64 per cent within one year. Their share of Federal Government domestic debt consequently rose from 16.67 per cent to 22.39 per cent.

The increase was also concentrated in the second quarter. Treasury bills rose by N2.92tn, or 17.60 per cent, from N16.57tn in March to N19.48tn in June. Conventional FGN naira bonds increased by N4.94tn or 13.54 per cent year-on-year to N41.47tn and by N2tn or 5.08 per cent between March and June.

In contrast, the securitised Ways and Means balance declined from N22.72tn in March to N22.11tn in June, a reduction of N613.34bn or 2.70 per cent. Promissory notes also fell substantially, dropping from N1.73tn in June 2025 to N1.22tn in June 2026, a 29.81 per cent reduction.

FGN Savings Bonds, by contrast, rose 33.78 per cent from N91.53bn to N122.45bn, although they still represented just 0.14 per cent of domestic Federal Government debt.

The DMO figures further show why the proposed $1.5bn facilities are significant for Nigeria’s creditor profile. Nigeria’s outstanding debt to the World Bank Group reached $20.73bn at the end of June 2026, comprising $19.12bn owed to IDA and $1.61bn to the International Bank for Reconstruction and Development.

The combined exposure increased by $1.34bn or 6.93 per cent from $19.39bn in June 2025, when IDA debt stood at $18.04bn and IBRD debt at $1.35bn.

The rise accelerated during the second quarter of 2026. World Bank exposure increased by $907.09m, or 4.58 per cent, from $19.82bn in March to $20.73bn in June. IDA alone increased by $733.08m during the quarter, while IBRD exposure rose by $174.01m.

At $20.73bn, the World Bank Group accounted for about 38 per cent of Nigeria’s entire $54.52bn external debt stock at the end of June. IDA was by far Nigeria’s single largest identified external creditor, with its $19.12bn exposure alone equivalent to roughly 35 per cent of the country’s external debt.

Nigeria’s overall multilateral debt stood at $24.76bn, or 45.42 per cent of external debt. This means World Bank obligations accounted for roughly 84 per cent of the country’s multilateral debt.

The remainder included $2.17bn owed to the African Development Bank, $1.01bn to the African Development Fund, $406.41m to the Islamic Development Bank and $314.98m to the International Fund for Agricultural Development, among others.

Commercial debt was almost as large as multilateral borrowing, reaching $23.16bn and representing 42.47 per cent of external liabilities. Eurobonds alone accounted for $18.55bn.

Other commercial obligations included $1.87bn owed to First Abu Dhabi Bank, $835.78m to Afreximbank and a $1.5bn First Abu Dhabi Bank total return swap.

Bilateral debt was considerably smaller at $6.61bn, representing 12.12 per cent of the external portfolio. China remained the largest bilateral source, with $4.91bn owed to the Export-Import Bank of China and another $573.53m to the China Development Bank. France accounted for $906.23m.

The creditor mix has shifted over the past year. In June 2025, multilateral institutions accounted for 49.36 per cent of Nigeria’s external debt, compared with 45.42 per cent in June 2026, despite an increase in their nominal exposure.

This reflects faster growth elsewhere in the external portfolio, particularly commercial borrowing. Eurobond liabilities increased from $17.32bn in June 2025 to $18.55bn in June 2026, while Nigeria also accumulated sizeable syndicated and other commercial obligations during the period.

The PUNCH earlier reported that former Vice-President Atiku Abubakar demanded a full reconciliation of Nigeria’s public debt, including new borrowings, Treasury Bills and controversial charges contained in the latest external debt-service records, as the country’s debt stock climbed to N166.79tn.

Atiku also demanded an apology from the President Bola Tinubu administration over the hardship Nigerians have experienced since the removal of the petrol subsidy and other economic reforms introduced in 2023.

The demands were contained in a statement on Saturday by Phrank Shaibu, Director of Strategic Communications of the African Democratic Congress Presidential Campaign Council.

“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 limiting resources available for public services and development.

Reacting to the rising World Bank commitments to Nigeria, Lagos-based economist Adewale Abimbola said loans from multilateral institutions such as the World Bank are largely concessionary, with interest rates typically below market levels and longer repayment tenors.

He noted that the critical question is not whether Nigeria should be borrowing, but whether the loans are structured and deployed effectively. “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 stressed that the economic impact of such loans depends on how well they are channelled into projects that can generate sustainable growth, strengthen revenue, and improve public services over time.