The Federal Government is in talks with the World Bank for three new loans worth $1.5bn, even as Nigeria’s total public debt rose to a record N166.79tn by the end of June 2026.
The proposed loans are three separate $500m facilities meant to fund climate resilience, social protection and early childhood development.
The first is an additional $500m for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL.
The World Bank is expected to consider the loan on October 29, 2026. The Federal Government is the borrower, while the Federal Ministry of Environment will oversee the project.
If approved, the additional funding will take ACReSAL’s total financing from $700m to $1.2bn. The money will come from the International Development Association, the World Bank’s concessional lending arm.
The project covers landscape restoration, watershed rehabilitation, erosion and flood control, irrigation, drainage, water harvesting, reforestation and other climate-related projects.
Of the $500m, $310m is earmarked for dryland management, $165m for community climate resilience and $25m for institutional strengthening and project management.
ACReSAL currently operates in 19 northern states and the Federal Capital Territory. It focuses on problems such as land degradation, water shortages, climate change and declining agricultural productivity.
The World Bank estimates that desertification and land degradation affect about 43 per cent of Nigeria’s land area. It also estimates that climate change could reduce the country’s GDP by about 2.6 per cent annually by 2030 and up to 6.7 per cent by 2050 if not properly addressed.
The second proposed loan is another $500m from the IDA for the Household Prosperity and Empowerment-Social Protection Project.
The project is still being prepared. Its technical design review is expected on October 30, 2026, while approval has been tentatively scheduled for March 16, 2027.
The Federal Ministry of Finance will borrow the money, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction will implement the programme.
The project will have a $420m results-based component and an $80m investment financing component.
It is aimed at providing regular support to poor and vulnerable households while gradually increasing the contribution of federal and state governments to social protection.
The programme will include targeted conditional and unconditional cash transfers, an updated social registry, the integration of NIN into the social protection system and stronger implementation at the federal, state and local government levels.
The World Bank said Nigeria spent only 0.14 per cent of its GDP on social safety-net programmes in 2021, compared with a global average of 1.5 per cent.
It also estimated that the share of Nigerians living in poverty increased from 40 per cent in 2019 to 56 per cent in 2023 and could reach 62.5 per cent in 2026.
The bank linked the increase to inflation, the COVID-19 pandemic, natural disasters and conflict. It also noted that the removal of fuel subsidy and exchange-rate reforms increased the cost of living in the short term.
The third $500m facility is for the Nigeria Early Childhood Development programme.
The World Bank has tentatively set March 15, 2027, for approval, while its technical design review is expected on October 30, 2026.
The Federal Ministry of Finance will be the borrower, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The programme will cover all 36 states and the FCT and focus on children aged zero to five.
It will support access to healthcare, nutrition, early learning, childcare, water and sanitation.
The loan will consist of $400m for the programme-for-results component and $100m for investment financing.
The World Bank said the programme was needed because 40 per cent of children under five in Nigeria are stunted, fewer than half are developmentally on track, while only 36 per cent of children aged 36 to 59 months attend organised early learning.
Nigeria’s debt profile
The proposed borrowing comes as Nigeria’s public debt rose by N14.39tn in one year, from N152.40tn in June 2025 to N166.79tn in June 2026, according to the Debt Management Office, that represents a 9.44 per cent increase.
In dollar terms, the debt rose by $21.27bn, from $99.66bn to $120.93bn, representing a 21.35 per cent increase.
The difference was partly due to the exchange rate used by the DMO to calculate the naira value of external debt.
The DMO used an exchange rate of N1,379.1842 to the dollar in June 2026, compared with N1,529.2105 a year earlier.
Between March and June 2026, total public debt increased by N7.44tn, from N159.35tn to N166.79tn.
Domestic debt stood at N91.59tn, accounting for 54.91 per cent of the total, while external debt was N75.20tn, or 45.09 per cent.
Domestic debt increased by N11.04tn from N80.55tn in June 2025.
External debt also rose from $46.98bn to $54.52bn during the same period.
The Federal Government accounted for most of the debt, with N87tn in domestic debt and N65.77tn in external liabilities.
States and the FCT owed N4.59tn domestically and N9.42tn externally.
Treasury bills rise
Federal Government domestic debt increased from N76.59tn in June 2025 to N87tn in June 2026.
FGN bonds remained the largest part of the debt at N64.84tn, accounting for 74.53 per cent.
Treasury bills, however, recorded the biggest increase, rising from N12.76tn to N19.48tn within one year.
This represents an increase of N6.72tn, or 52.64 per cent.
Treasury bills now account for 22.39 per cent of the Federal Government’s domestic debt, compared with 16.67 per cent a year earlier.
Between March and June alone, Treasury bills rose from N16.57tn to N19.48tn.
The securitised Ways and Means balance, however, dropped from N22.72tn in March to N22.11tn in June.
Promissory notes also fell from N1.73tn in June 2025 to N1.22tn in June 2026.
FGN Savings Bonds increased from N91.53bn to N122.45bn, although they still made up only 0.14 per cent of the Federal Government’s domestic debt.
World Bank debt hits $20.73bn
Nigeria’s debt to the World Bank Group stood at $20.73bn at the end of June 2026.
The amount comprises $19.12bn owed to IDA and $1.61bn owed to the International Bank for Reconstruction and Development.
The figure increased by $1.34bn from $19.39bn in June 2025.
The World Bank Group accounted for about 38 per cent of Nigeria’s $54.52bn external debt as of June.
Nigeria’s total multilateral debt stood at $24.76bn, representing 45.42 per cent of its external debt.
The African Development Bank was owed $2.17bn, while the African Development Fund was owed $1.01bn.
Nigeria also owed $406.41m to the Islamic Development Bank and $314.98m to the International Fund for Agricultural Development.
Commercial debt stood at $23.16bn, representing 42.47 per cent of external debt. Eurobonds accounted for $18.55bn.
Bilateral debt stood at $6.61bn, or 12.12 per cent of the external debt portfolio.
China remained Nigeria’s biggest bilateral creditor, with $4.91bn owed to the Export-Import Bank of China and $573.53m to the China Development Bank. France was owed $906.23m.
Multilateral institutions accounted for 49.36 per cent of Nigeria’s external debt in June 2025. Their share fell to 45.42 per cent in June 2026, even though the amount owed to them increased.
The change was largely due to faster growth in commercial borrowing, with Nigeria’s Eurobond debt rising from $17.32bn to $18.55bn during the period.
