By John Umeh
The World Bank is considering Nigeria’s latest request for a $1 billion Development Policy Financing (DPF) loan under a new initiative titled “Nigeria Actions for Investment and Jobs Acceleration (P512892)”, with a tentative approval date set for December 16, 2025.
According to a project document released on October 27, the funding package is split evenly between a $500 million International Development Association (IDA) credit and a $500 million International Bank for Reconstruction and Development (IBRD) loan.
The loan, categorized under the World Bank’s Macroeconomics, Trade, and Investment practice for the Western and Central Africa region, aims to deepen Nigeria’s ongoing economic reforms, stimulate private sector growth, and fast-track job creation across strategic sectors.
Strengthening Economic Reforms and Stability
The World Bank explained that the new facility will consolidate Nigeria’s macroeconomic reforms and facilitate a decisive transition from economic stabilization to sustainable, inclusive growth.
“The proposed Development Policy Financing supports Nigeria’s pivot from stabilization to inclusive growth and job creation,” the document noted. “It seeks to catalyze private sector–led investment by expanding access to credit, deepening capital markets and digital services, easing inflationary pressures, and promoting export diversification.”
Nigeria has undergone significant fiscal and monetary reforms since 2023, including the removal of petrol subsidies, the unification of foreign exchange rates, and the discontinuation of Central Bank deficit financing. These measures, championed under President Bola Tinubu’s Renewed Hope Agenda, have helped stabilize the economy and restore investor confidence, according to government sources.
Addressing Persistent Challenges
Despite recent reforms, the World Bank highlighted that over 130 million Nigerians remain in poverty, noting that while macroeconomic indicators are stabilizing, the economy has yet to achieve broad-based, inclusive growth.
The new loan operation will focus on two strategic pillars — unlocking private sector expansion and reducing the cost of doing business — with an emphasis on agriculture, trade, and digital services.
Under the first pillar, the initiative will expand access to finance and digital inclusion, supported by reforms such as the Investment and Securities Act 2025, new credit enhancement mechanisms, and updated CBN Rulebooks to strengthen microfinance and non-bank financial institutions.
It also backs the National Digital Economy and E-Governance Bill 2025, which seeks to create a legal framework for e-transactions, authentication services, and digital record management — a critical step toward establishing a fully paperless, modern government system.
Lowering Costs and Boosting Competitiveness
The second pillar targets policies that reduce inflation, enhance productivity, and strengthen export competitiveness. Planned actions include streamlining trade barriers, implementing AfCFTA tariff concessions, and improving certified seed systems for key crops such as rice, maize, and soybeans. These steps aim to improve food security, reduce import dependency, and attract new investment in the agricultural value chain.
Broader Economic Impact
The $1 billion loan forms part of a larger FY2026 World Bank support framework for Nigeria, alongside complementary programs such as FINCLUDE (MSME financing), BRIDGE (digital infrastructure), and AGROW (agricultural value chain development). Collectively, these initiatives are expected to attract private capital, expand credit access, and strengthen small and medium-sized enterprises (SMEs).
Aligned with the Paris Climate Agreement, the programme also includes climate-resilient agricultural initiatives, digital governance systems that reduce emissions, and efforts to curb deforestation.
The World Bank projects that the reforms backed by this funding could lower food inflation, boost agricultural productivity, expand digital exports, and create millions of jobs, particularly for youths and smallholder farmers.
Nigeria’s Growing Debt Profile
According to data from the Debt Management Office (DMO), Nigeria’s external debt stood at $46.98 billion as of June 30, 2025. The World Bank Group remains Nigeria’s largest single creditor, holding $19.39 billion, which accounts for 41.3 percent of the country’s total external debt.
Once approved, the new $1 billion loan will be disbursed in two tranches as reform milestones are achieved, with implementation coordinated by the Federal Ministry of Finance in collaboration with the Central Bank of Nigeria and other key ministries.
If finalized, this facility will represent one of the most significant World Bank support operations for Nigeria in recent years, reinforcing the country’s shift from short-term stabilization to long-term, inclusive, and resilient growth.
