The Federal Government of Nigeria has confirmed plans to seek an additional $1.75bn loan from the World Bank before the end of 2025, even as revenue collection recorded a 40.5 percent increase in the first eight months of the year.
According to the Presidency, total revenue between January and August 2025 rose to ₦20.59tn, surpassing the ₦14.6tn collected during the same period in 2024.
Non-oil revenue accounted for 75 percent of the total inflows, marking the strongest performance in years.
Special Adviser to the President on Information and Strategy, Bayo Onanuga, said the boost in non-oil income places Nigeria on track to meet its annual fiscal targets.
Despite this revenue jump, Nigeria still struggles with funding gaps in critical areas such as infrastructure, healthcare, and technology.
Contractors under the All Indigenous Contractors Association of Nigeria protested in Abuja this week, demanding ₦4tn in unpaid funds for projects completed in 2024.
To close these gaps, the government is turning once again to international borrowing.
Data from the World Bank show that four major projects are lined up for approval within the year. These include:
Nigeria Sustainable Agricultural Value-Chains for Growth Project ($500m): aimed at boosting farm productivity and rural development.
Building Resilient Digital Infrastructure for Growth ($500m): designed to improve Nigeria’s digital economy and technology backbone.
Health Security Programme for Western and Central Africa, Phase II ($250m): to strengthen Nigeria’s ability to handle health emergencies.
Fostering Inclusive Finance for MSMEs Project ($500m): focused on expanding access to loans and credit for small and medium businesses.
These loans are concessionary, with interest rates far below commercial levels and longer repayment periods.
However, economists remain divided on whether Nigeria should continue piling on debt.
Development economist Dr Aliyu Ilias warned that the country’s debt has ballooned from ₦87tn under former President Muhammadu Buhari to about ₦149tn under President Bola Tinubu.
He fears the figure could approach ₦180tn if the borrowing trend continues.
He noted that while borrowing can stimulate development, excessive debt servicing reduces funds available for capital projects, fuels inflation, and worsens the naira’s instability.
In contrast, Lagos-based economist Adewale Abimbola argued that loans tied to productive projects can help Nigeria in the medium term.
He stressed that the real issue lies in how efficiently the funds are used.
Nigeria’s total debt to the World Bank now stands at $18.23bn, representing nearly 40 percent of its external debt stock of $45.98bn as of March 2025.
The World Bank alone accounts for over 81 percent of Nigeria’s total multilateral debt, underscoring the country’s heavy reliance on the institution for financing.
Analysts insist that while deficit financing is common globally, Nigeria must strengthen domestic revenue generation and ensure borrowed funds are invested in projects that expand its capacity to repay.
Without discipline, they warn, the country risks falling into a cycle of borrowing to repay old loans a trap that could deepen its economic vulnerability.