The Federal Government is negotiating three new World Bank loans totalling $1.5bn to finance climate resilience, social protection and early childhood development, amid a rise in Nigeria’s public debt to N166.79tn as of June 2026.
Documents obtained from the World Bank show that the proposed facilities comprise three separate $500m credits, with two expected to receive approval in March 2027 and the first scheduled for consideration in October 2026.
The first facility is an additional $500m financing for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL. The World Bank has tentatively scheduled October 29, 2026, for its board to consider the proposal.
The Federal Ministry of Environment will implement the project, while the Federal Republic of Nigeria is the borrower.
The proposed financing would increase ACReSAL’s funding from the previously approved $700m to $1.2bn, with the entire amount sourced from the International Development Association, the World Bank’s concessional lending arm.
According to the World Bank document, “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, drainage, water harvesting, reforestation and other climate adaptation measures.
Of the proposed $500m, $310m would go towards dryland management, $165m to community climate resilience, while $25m would fund institutional strengthening and project management.
ACReSAL currently covers 19 northern states and the Federal Capital Territory, focusing on land degradation, water shortages, climate vulnerability and declining agricultural productivity.
The World Bank estimated that desertification and land degradation affect 43 per cent of Nigeria’s land area. It warned that failure to address climate change could reduce the country’s Gross Domestic Product by about 2.6 per cent annually by 2030 and 6.7 per cent by 2050.
The second proposed facility is a $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project, known as HOPE-SP.
The project is still undergoing preparation, with its technical design review scheduled for October 30, 2026. The bank has tentatively fixed March 16, 2027, for approval.
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 proposed financing comprises a $420m results-based programme and an $80m investment project financing component, both to be funded by IDA.
The initiative is designed to provide regular assistance to poor and vulnerable households while gradually transferring more of the funding responsibility to federal and state governments.
The World Bank document stated that 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 project would support targeted conditional and unconditional cash transfers, upgrade the national social registry, integrate the National Identification Number into the social protection information system and improve implementation across the three tiers of government.
The bank noted that Nigeria spent only 0.14 per cent of its GDP on social safety-net programmes in 2021, compared with the global average of 1.5 per cent and 1.2 per cent among lower-middle-income countries.
It 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.
The World Bank attributed the worsening situation to several factors, including the COVID-19 pandemic, inflation, natural disasters and conflict. It also noted that the removal of the petrol subsidy and exchange-rate reforms increased living costs in the short term.
The third proposed $500m facility is for the Nigeria Early Childhood Development Programme, which is expected to receive approval on March 15, 2027. Its technical design review is also scheduled for October 30, 2026.
The Federal Ministry of Finance will serve as the borrower, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The initiative will cover all 36 states and the FCT, with the aim of improving children’s access to healthcare, nutrition, early learning, childcare, water, sanitation and other essential services.
The proposed financing consists of a $400m programme-for-results component and $100m for investment project financing, both to be provided by IDA.
The World Bank said the intervention was 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 bearing much of the burden.
### Nigeria’s Public Debt Rises
The proposed borrowing comes as figures from the Debt Management Office show that Nigeria’s total public debt increased by N14.39tn in one year, rising from N152.40tn in June 2025 to N166.79tn at the end of June 2026.
The increase represents a 9.44 per cent year-on-year growth. In dollar terms, however, the debt rose by $21.27bn, or 21.35 per cent, from $99.66bn to $120.93bn.
The difference between the naira and dollar figures was partly attributed to the stronger exchange rate used to calculate the value of external debt.
The DMO used an exchange rate of N1,379.1842 to the dollar in June 2026, compared with N1,529.2105 a year earlier. Consequently, dollar-denominated debt increased at a faster rate than its naira equivalent.
On a quarterly basis, public debt rose by N7.44tn, or 4.67 per cent, from N159.35tn in March 2026 to N166.79tn in June.
In dollar terms, the debt increased by $5.98bn, or 5.20 per cent, from $114.95bn in March.
Domestic debt accounted for the larger share of Nigeria’s liabilities, standing at N91.59tn, or 54.91 per cent of the total. External debt was N75.20tn, representing 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 rose by 26.07 per cent,
from $52.67bn to $66.41bn.Between March and June 2026, domestic debt grew by N4.19tn, or 4.79 per cent, from N87.40tn.
External debt increased from $46.98bn in June 2025 to $54.52bn in June 2026, representing a rise of $7.54bn, or 16.05 per cent.
Its naira value, however, grew by only N3.35tn, or 4.66 per cent, from N71.85tn to N75.20tn because of the exchange-rate effect.
The Federal Government accounted for most of the country’s debt. Its domestic liabilities stood at N87tn, while states and the FCT owed N4.59tn domestically.
Federal Government external debt was N65.77tn, compared with N9.42tn owed externally by states and the FCT.
### Treasury Bills Drive Domestic Borrowing
An analysis of the Federal Government’s domestic debt showed that Treasury bills and conventional naira bonds accounted for a significant portion of the increase.
Federal Government 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 grew by N4.12tn, or 4.97 per cent, during the second quarter of 2026.
FGN bonds remained the largest component at N64.84tn, representing 74.53 per cent of the Federal Government’s 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.
Treasury bills recorded the largest absolute increase, rising from N12.76tn in June 2025 to N19.48tn in June 2026. The N6.72tn increase represented a 52.64 per cent growth within one year.
Their share of the Federal Government’s domestic debt consequently rose from 16.67 per cent to 22.39 per cent.
The increase was also pronounced in the second quarter, with Treasury bills rising 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. They also rose by N2tn, or 5.08 per cent, between March and June.
In contrast, the securitised Ways and Means balance declined by N613.34bn, or 2.70 per cent, from N22.72tn in March to N22.11tn in June.
Promissory notes fell from N1.73tn in June 2025 to N1.22tn in June 2026, representing a 29.81 per cent decline.
FGN Savings Bonds increased by 33.78 per cent, from N91.53bn to N122.45bn, but accounted for only 0.14 per cent of the Federal Government’s domestic debt.
### World Bank Exposure Hits $20.73bn
The DMO figures also show that Nigeria’s outstanding debt to the World Bank Group reached $20.73bn at the end of June 2026.
The amount comprises $19.12bn owed to the International Development Association 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 increase accelerated in the second quarter of 2026, with World Bank exposure rising by $907.09m, or 4.58 per cent, from $19.82bn in March to $20.73bn in June.
IDA debt increased by $733.08m during the quarter, while IBRD exposure rose by $174.01m.
The World Bank Group accounted for about 38 per cent of Nigeria’s total external debt of $54.52bn at the end of June. IDA alone accounted for approximately 35 per cent of the country’s external debt, making it Nigeria’s largest identified external creditor.
Nigeria’s total multilateral debt stood at $24.76bn, representing 45.42 per cent of external liabilities. World Bank obligations accounted for about 84 per cent of the multilateral debt.
Other multilateral creditors included the African Development Bank, to which Nigeria owed $2.17bn; the African Development Fund, $1.01bn; the Islamic Development Bank, $406.41m; and the International Fund for Agricultural Development, $314.98m.
Commercial debt stood at $23.16bn, representing 42.47 per cent of external liabilities, with Eurobonds accounting 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 lower at $6.61bn, representing 12.12 per cent of the external debt portfolio.
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. France was owed $906.23m.
The composition of Nigeria’s external debt changed over the year, with multilateral institutions accounting for 45.42 per cent in June 2026, down from 49.36 per cent in June 2025, despite an increase in the amount owed to them.
The shift reflected faster growth in other external borrowing, particularly commercial debt. Eurobond liabilities increased from $17.32bn in June 2025 to $18.55bn in June 2026, alongside additional syndicated and other commercial obligations.
Reacting to the rising debt profile, former Vice-President Atiku Abubakar called for a comprehensive reconciliation of Nigeria’s public debt, including new borrowings, Treasury bills and disputed charges in recent external debt-service records.
Atiku also demanded an apology from President Bola Tinubu’s administration over the hardship Nigerians have experienced since the removal of the petrol subsidy and the introduction of other economic reforms in 2023.
The demands were contained in a statement issued 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 reducing funds available for public services and development.
However, Lagos-based economist Adewale Abimbola said loans from multilateral institutions such as the World Bank were generally concessional, with lower interest rates and longer repayment periods than commercial borrowing.
He said the central issue was not whether Nigeria should borrow, but how the funds were structured and utilised.
“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 loans’ economic impact would depend on whether the funds were invested in projects capable of generating sustainable growth, increasing revenue and improving public services over time.
