The Federal Government is in advanced discussions with the World Bank over a proposed $1.25bn loan facility aimed at supporting economic reforms, investment growth, and job creation in Nigeria.

According to The PUNCH, the proposed funding, known as the Nigeria Actions for Investment and Jobs Acceleration Programme, has reportedly reached a critical stage in the World Bank’s approval process and is expected to be presented to the lender’s Board of Executive Directors for final consideration on June 26, 2026.

If approved, the loan would become one of the largest World Bank facilities secured under President Bola Tinubu’s administration, second only to the $1.5bn economic stabilisation loan approved in June 2024.

At the current exchange rate of N1,361.4 to one dollar, the proposed loan is estimated at about N1.7tn, underscoring the scale of external financing the Federal Government is pursuing to sustain ongoing economic reforms.

Available records indicate that the loan has moved beyond the initial concept and appraisal stages to what the World Bank describes as the “decision meeting” phase — a near-final internal review where management determines whether a project should proceed for board approval.

According to a programme document, the World Bank authorised its team “to appraise and negotiate,” suggesting that major discussions on financing terms and reform commitments have largely been concluded.

The Federal Ministry of Finance is expected to coordinate implementation of the programme if approved.

The World Bank said the facility is intended to support Nigeria’s efforts to expand access to finance, digital services, and electricity while strengthening competitiveness through reforms in taxation, trade, and agriculture.

“The $1.25bn standalone operation builds on recent progress in restoring stability and underpins the Government’s shift toward an inclusive growth model,” the lender stated.

The latest borrowing move comes amid increased scrutiny over Nigeria’s growing debt profile. Between June 2023 and May 2026, the World Bank approved about $9.35bn in loans and credits for Nigeria across sectors such as education, healthcare, agriculture, social protection, renewable energy, and economic reforms.

Should the new facility receive approval, total World Bank financing secured under the current administration would rise to approximately $10.6bn.

Nigeria’s external debt stock stood at N74.43tn, equivalent to $51.86bn, as of December 31, 2025. Analysts estimate that a full disbursement of the proposed facility could raise the country’s external debt to about N76.13tn or $53.11bn.

Similarly, total public debt may rise from N159.28tn to N160.98tn, while the dollar equivalent could increase from $110.97bn to about $112.22bn.

Meanwhile, the Accountant-General of the Federation, Shamseldeen Ogunjimi, recently cautioned that prolonged delays in loan approvals and disbursements could discourage Nigeria from pursuing such arrangements.

Speaking during a meeting with a World Bank delegation in Abuja, Ogunjimi said the government expects faster processing timelines.

“If approvals take more than six months, the Nigerian Government may no longer honour such arrangements,” he said, stressing that the facilities are loans with repayment obligations and not grants.

He urged the World Bank to expedite the approval and release of project funds to align with Nigeria’s fiscal and development priorities.

However, a Senior External Affairs Officer at the World Bank, Mansir Nasir, explained that disbursement of project funds is usually done in phases depending on the financing structure and nature of each project.

Economic experts have expressed mixed reactions over the country’s rising dependence on foreign loans.

A Lagos-based economist, Adewale Abimbola, argued that concessional loans from institutions like the World Bank are not necessarily harmful if properly utilised.

“Borrowing itself is not the issue; what matters is utilisation. If the funds are tied to viable projects with medium-term revenue potential, it may be beneficial for economic growth,” he said.

On his part, development economist and Chief Executive Officer of CSA Advisory, Aliyu Ilias, questioned the need for additional borrowing at a time the government has repeatedly spoken of improved revenues following fuel subsidy removal.

Similarly, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, warned that Nigeria must ensure any fresh borrowing aligns with debt sustainability goals.

“Without sufficient revenue to service obligations, the country risks borrowing simply to repay existing debt,” Yusuf cautioned, adding that excessive foreign borrowing could further pressure the naira and foreign reserves.

The Nigerian Economic Summit Group also raised concerns in its latest Debt Burden Monitor report, describing Nigeria’s fiscal outlook as fragile despite signs of temporary improvement in some debt indicators.

According to the group, the country remains in a “high-risk fiscal environment,” warning that persistent borrowing without stronger revenue mobilisation could worsen long-term fiscal pressures.