FG seeks fresh $1.5bn World Bank loan pushing Nigeria’s total public debt to a record N166.79tn

The Federal Government has opened discussions with the World Bank for three new loans totalling $1.5bn, as Nigeria’s total public debt rose to a record N166.79tn at the end of June 2026. Documents from the World Bank show that the proposed financing comprises three separate $500m facilities covering climate resilience, social protection and early childhood development.

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

If approved, the additional financing would increase the size of the ACReSAL programme from $700m to $1.2bn, with funding provided through the International Development Association, the World Bank’s concessional financing arm. According to the World Bank document, the Nigerian government requested the additional $500m to expand the project and strengthen arrangements for sustaining integrated landscape management.

The funding 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 proposed $500m, $310m would be allocated to dryland management, $165m to community climate resilience and $25m to institutional strengthening and project management.

ACReSAL currently operates across 19 northern states and the Federal Capital Territory and is designed to address land degradation, water insecurity, climate vulnerability and declining agricultural productivity. The second proposed facility is a $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project.

The project is at an earlier stage of preparation, with its technical design review expected on October 30, 2026, and a tentative World Bank approval date of March 16, 2027. The programme would provide social assistance to poor and vulnerable households through targeted unconditional and conditional cash transfers. It would also modernise the social registry, integrate National Identification Numbers into the social protection information system and strengthen implementation across federal, state and local governments.

The third proposed $500m facility is for the Nigeria Early Childhood Development programme, which has an estimated approval date of March 15, 2027. The programme would cover all 36 states and the FCT and is intended to improve access to health, nutrition, early learning, childcare, water, sanitation and other services for children aged five and below.

The proposed borrowing comes as figures from the Debt Management Office show that Nigeria’s public debt increased by N14.39tn within one year, rising from N152.40tn in June 2025 to N166.79tn in June 2026. This represented a 9.44 per cent year-on-year increase. In dollar terms, public debt rose by $21.27bn, or 21.35 per cent, from $99.66bn to $120.93bn during the same period.
Domestic debt stood at N91.59tn at the end of June, accounting for 54.91 per cent of the total debt stock, while external debt amounted to N75.20tn, representing 45.09 per cent.

The Federal Government accounted for most of the debt, with N87tn in domestic liabilities and N65.77tn in external obligations. States and the FCT owed N4.59tn domestically and N9.42tn externally. Treasury bills recorded significant growth, rising from N12.76tn in June 2025 to N19.48tn in June 2026, an increase of N6.72tn or 52.64 per cent.

Nigeria’s outstanding debt to the World Bank Group also reached $20.73bn at the end of June 2026, comprising $19.12bn owed to the IDA and $1.61bn to the International Bank for Reconstruction and Development. The World Bank Group consequently accounted for about 38 per cent of Nigeria’s $54.52bn external debt stock at the end of June. The proposed $1.5bn facilities remain at various stages of preparation and consideration and have not all received final World Bank approval.