In a world where economies are struggling to recover from global shocks, Nigeria once again finds itself at the centre of a high-stakes financial negotiation. The World Bank has tentatively set December 16 as the approval date for a fresh $1 billion loan package to Africa’s largest economy, under a new initiative known as “Nigeria Actions for Investment and Jobs Acceleration (P512892).”
The move, coming at a time when millions of Nigerians are still grappling with inflation and joblessness, signals a renewed international push to steady the country’s economic course and spur inclusive growth.
According to a project document released by the World Bank on October 27, the facility is a blend of a $500 million International Development Association (IDA) credit and a $500 million International Bank for Reconstruction and Development (IBRD) loan.
It is not merely another round of borrowing, but a strategic intervention aimed at reinforcing Nigeria’s macroeconomic reforms while empowering the private sector to drive job creation and investment.
The programme, which falls under the Bank’s Macroeconomics, Trade and Investment practice area for the Western and Central Africa region, is tailored to complement Nigeria’s recent policy shifts. It seeks to transform the nation’s economic landscape by tackling structural barriers that stifle private investment, while promoting new opportunities in agriculture, trade, and digital technology. In the words of the World Bank, the funding will help Nigeria “pivot from stabilisation to inclusive growth and job creation.”
Structured as a two-tranche standalone operation, the $1 billion Development Policy Financing (DPF) loan aims to catalyse private sector–led investment by expanding access to credit, deepening capital markets and digital services, easing inflationary pressures, and promoting export diversification.
The Bank confirmed that preparations for the loan have already been authorised to proceed through the Federal Ministry of Finance, marking a critical step in the approval process.
The proposal comes on the heels of a series of bold economic reforms introduced by President Bola Tinubu’s administration since 2023. These reforms including the removal of the petrol subsidy, unification of exchange rates, and ending of central bank deficit financing have been both celebrated and criticised.
The Federal Government insists that these measures have helped stabilise the economy, narrow the fiscal deficit, and restore a measure of investor confidence.
Yet beneath the surface of those reforms lies a harsher truth. Growth remains fragile, and poverty runs deep. The World Bank notes that more than 130 million Nigerians still live below the poverty line, a staggering figure that underscores the scale of the challenge.
“While macroeconomic stability has returned,” the report observed, “Nigeria’s economy has yet to shift decisively into a higher and inclusive growth path.” For many Nigerians, the benefits of reform have yet to trickle down to the streets, where food inflation and unemployment remain biting realities.
To address these gaps, the new policy loan is anchored on two major pillars: unlocking private sector growth and lowering the cost of doing business.
These pillars aim to create a friendlier environment for entrepreneurs, attract new investment, and drive productivity in critical sectors. Under the first pillar, the Bank plans to support measures that expand access to financial credit and deepen digital inclusion.
This includes support for the Investment and Securities Act 2025, new credit enhancement facilities, and a Central Bank of Nigeria (CBN) Rulebook designed to strengthen microfinance institutions and non-bank financial players.
The facility will also back the National Digital Economy and E-Governance Bill 2025, a landmark legislation that will provide a legal foundation for electronic transactions, authentication services, and digital records. These are seen as essential steps toward creating a modern, paperless government system that can improve transparency and efficiency.
The second pillar focuses on reducing the costs of living and doing business—an urgent need in an economy where high logistics costs and volatile inflation often suffocate enterprise. The Bank’s report outlines plans to simplify trade procedures, adopt African Continental Free Trade Area (AfCFTA) tariff concessions, and modernise agricultural systems by improving certified seed production for crops such as rice, maize, and soybeans.
These reforms, the Bank says, will boost food security, enhance export competitiveness, and attract new private investment into Nigeria’s agricultural value chain.
According to the document, the $1 billion DPF loan is part of a larger FY2026 World Bank support package that aligns with Nigeria’s long-term growth agenda.
Other complementary projects include FINCLUDE (to enhance MSME financing), BRIDGE (focused on digital infrastructure), and AGROW (dedicated to agricultural value chain growth). Together, these projects are expected to unlock private capital, expand access to credit, and foster an enabling environment for small and medium-sized enterprises.
Importantly, the initiative is also aligned with the Paris Climate Agreement, incorporating elements of climate-resilient agriculture, reduced deforestation, and digital governance systems that minimise carbon emissions from traditional paper-based processes. For a country facing the dual challenge of economic fragility and environmental vulnerability, this alignment signals a shift toward sustainability-conscious development.
The World Bank projects that the reforms supported under this operation will help reduce food inflation, raise agricultural productivity, and expand digital exports all while generating millions of direct and indirect jobs.
It also emphasised that improved access to credit, particularly for micro, small, and medium enterprises (MSMEs) and smallholder farmers, will translate into “expanded economic opportunities by creating jobs, including for the poor.”
Beyond the macroeconomic metrics, the Bank highlights a tangible human benefit: lower prices and improved consumer welfare. Reduced import bans and lower tariffs on key inputs are expected to make goods cheaper, helping ordinary Nigerians stretch their incomes further while boosting the country’s competitiveness in regional markets. The ripple effects could be far-reaching from empowering small traders to reviving struggling local industries.
Once approved, the $1 billion loan will be disbursed in two tranches, tied to policy milestones agreed upon by both sides. Oversight will rest with the Federal Ministry of Finance, working closely with the Central Bank of Nigeria and other relevant ministries.
If fully implemented, the initiative could mark one of the most ambitious World Bank policy support operations for Nigeria in recent years potentially anchoring the country’s transition from short-term stabilisation to long-term inclusive growth.
But Nigeria’s growing reliance on multilateral debt raises new questions about sustainability. As of June 30, 2025, the country’s external debt stood at $46.98 billion, according to data from the Debt Management Office (DMO).
The World Bank remains Nigeria’s single largest creditor, accounting for $19.39 billion – a sum made up of $18.04 billion from the IDA and $1.35 billion from the IBRD. That means the Bank now holds over 41 per cent of Nigeria’s total external debt, underscoring its dominant role in financing the nation’s development agenda.