Abuja, Nigeria – Nigeria is set to secure approximately $9.65 billion in new concessional loans and facilities from the World Bank Group between 2023 and the end of 2025.1 This massive borrowing commitment underscores the Federal Government’s reliance on multilateral financing to stabilize the economy, plug critical infrastructure gaps, and fund extensive social sector reforms.2
The funds, which comprise both International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD) loans, are currently being channeled into a broad array of development projects across key national priority areas.3
Sectoral Focus of the New Commitments
The World Bank’s lending commitment reflects Nigeria’s focus on human capital development and essential infrastructure, with rising commitments earmarked for:
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Power and Infrastructure: Significant funds are directed toward power sector recovery, renewable energy scale-up (e.g., the Distributed Access through Renewable Energy Scale-up project), and digital infrastructure (e.g., the Building Resilient Digital Infrastructure for Growth – BRIDGE project).4
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Human Capital: This includes large loans for education (e.g., HOPE for Quality Basic Education for All, girls’ education initiatives), social protection (e.g., NG-CARES program expansion), and nutrition (Accelerating Nutrition Results in Nigeria 2.0).5
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Health Security: Funds are being approved to strengthen primary healthcare provision and boost the country’s overall health security capabilities.6
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Financial Inclusion: New pipeline projects, such as the Fostering Inclusive Finance for MSMEs in Nigeria project, aim to boost access to finance for small businesses through the Development Bank of Nigeria.7
Debt Sustainability: Mixed Concerns
While World Bank loans are highly concessional (favorable interest rates and long repayment periods), the sheer volume of borrowing is raising mixed concerns among Nigerian economists and financial analysts:
| Perspective | Economist Concerns | World Bank Stance |
| Debt Sustainability | Economists stress that debt sustainability hinges on the country’s revenue-to-GDP ratio, which remains low. They warn that borrowing without robust revenue mobilization risks a vicious cycle of borrowing to service existing debt. | The World Bank’s recent Nigeria Development Update (NDU) noted that the public debt-to-GDP ratio is projected to decline from 42.9% in 2024 to 39.8% in 2025, supported by recent macroeconomic reforms. |
| Revenue Mobilisation | The long-term ability to repay these foreign currency debts is tied to increasing non-oil revenue. Critics urge aggressive tax reforms and transparency to match the borrowing rate. | The Bank commends Nigeria for taking “bold steps” like the fuel subsidy removal and exchange rate unification, which have already begun to reduce fiscal distortions and strengthen external balances. |
| Project Utilisation | Concerns exist regarding the effectiveness and productivity of past loan-funded projects. Analysts emphasize that the loans must be tied to viable projects with medium-term revenue prospects to truly benefit the economy. | Projects are structured to target fundamental issues. For example, the education funding is projected to benefit 29 million children and 500,000 teachers. |
Nigeria’s Global Standing
The accumulating loans have cemented Nigeria’s position as a top global borrower from the World Bank’s concessionary arm:
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As of September 2025, Nigeria maintains its ranking as the third-largest debtor to the World Bank’s International Development Association (IDA) globally, with total exposure hitting approximately $18.5 billion.8
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The total debt owed to the World Bank Group (IDA and IBRD) stood at $19.39 billion as of June 30, 2025.9
The current administration’s borrowing, totaling over $7.45 billion in approvals since 2023, reflects its strategy to rely on low-cost external funding to drive its economic reform agenda.
