Precious Nwonu, Enugu
The Federal Government is seeking $1.5bn in fresh financing from the World Bank as Nigeria’s total public debt rose to a record N166.79tn at the end of June 2026.
Documents from the World Bank indicate that the proposed borrowing consists of three separate $500m facilities targeting climate resilience, social protection and early childhood development.
The first facility 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 facility on October 29, 2026. The Federal Republic of Nigeria is listed as the borrower, while the Federal Ministry of Environment will implement the project.
If approved, the additional financing will increase ACReSAL’s total funding from $700m to $1.2bn, with the new facility to be provided through the International Development Association, the World Bank’s concessional lending arm.
According to the World Bank, the additional funds will be used to expand the project’s results and strengthen arrangements for sustainable landscape management.
The proposed interventions include land restoration, watershed rehabilitation, erosion and flood control, irrigation and drainage, water harvesting and storage, reforestation and other climate adaptation measures.
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, focusing on land degradation, water insecurity, climate vulnerability 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 projects that climate change could reduce the country’s gross domestic product by about 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050 if not adequately addressed.
### $500m Social Protection Loan
The second proposed facility is a $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project.
The project is still under preparation, with a technical design review scheduled for October 30, 2026. The World Bank has tentatively set March 16, 2027, for consideration of the project.
The Federal Ministry of Finance is listed as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction will implement the programme.
The project comprises a $420m results-based financing component and an $80m investment project financing component.
It is designed to establish regular social assistance for poor and vulnerable households while gradually increasing the contribution of federal and state governments to social protection financing.
The proposed programme will include targeted conditional and unconditional cash transfers, an upgrade of the social registry, integration of the National Identification Number into the social protection information system and stronger implementation at 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 and 1.2 per cent among lower-middle-income countries.
The lender also estimated that the proportion of Nigerians living in poverty rose from 40 per cent in 2019 to 56 per cent in 2023 and could reach 62.5 per cent in 2026.
It attributed the deterioration to factors including the COVID-19 pandemic, inflation, natural disasters and conflict, while noting that the removal of fuel subsidy and foreign exchange reforms increased living costs in the short term.
### Third Loan Targets Early Childhood Development
The third proposed $500m loan is for the Nigeria Early Childhood Development Programme.
The project is expected to undergo technical design review on October 30, 2026, with tentative approval scheduled for March 15, 2027.
The Federal Ministry of Finance will serve as the borrower, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The project will cover all 36 states and the FCT and focus on improving access to healthcare, nutrition, early learning, childcare, water and sanitation and other essential services for children aged zero to five.
The proposed financing consists of a $400m programme-for-results component and $100m in investment project financing.
The World Bank said the programme was necessary because 40 per cent of Nigerian children under five are stunted, fewer than half are developmentally on track and only 36 per cent of children aged 36 to 59 months attend organised early learning.
### Public Debt Rises By N14.39tn
The proposed borrowing comes amid a sharp increase in Nigeria’s public debt.
According to the Debt Management Office, the country’s total public debt rose from N152.40tn in June 2025 to N166.79tn in June 2026.
The N14.39tn increase represents a 9.44 per cent rise within one year.
In dollar terms, total public debt increased from $99.66bn to $120.93bn, representing a $21.27bn or 21.35 per cent increase.
The difference between the naira and dollar growth rates was partly linked to the exchange rate used to value Nigeria’s external debt. The DMO used an exchange rate of N1,379.1842 to the dollar in June 2026, compared with N1,529.2105 in June 2025.
On a quarterly basis, public debt increased from N159.35tn in March 2026 to N166.79tn in June, representing a rise of N7.44tn or 4.67 per cent.
Domestic debt accounted for the larger share of the portfolio at N91.59tn, or 54.91 per cent, while external debt stood at N75.20tn, representing 45.09 per cent.
Domestic debt increased from N80.55tn in June 2025 to N91.59tn in June 2026, while external debt rose from N71.85tn to N75.20tn over the same period.
### Treasury Bills Drive Domestic Borrowing
Federal Government domestic debt increased from N76.59tn in June 2025 to N87tn in June 2026.
Federal Government bonds remained the largest component at N64.84tn, representing 74.53 per cent of domestic debt.
However, Treasury bills recorded a significant increase during the period.
Outstanding Nigerian Treasury Bills rose from N12.76tn in June 2025 to N19.48tn in June 2026, representing a N6.72tn or 52.64 per cent increase.
Their share of Federal Government domestic debt consequently increased from 16.67 per cent to 22.39 per cent.
Between March and June 2026, Treasury bills increased by N2.92tn, or 17.60 per cent, from N16.57tn to N19.48tn.
Meanwhile, the securitised Ways and Means balance declined from N22.72tn in March to N22.11tn in June.
FGN Savings Bonds increased from N91.53bn to N122.45bn during the year, although they remained a small portion of the government’s domestic debt.
### World Bank Exposure Hits $20.73bn
The DMO figures show that Nigeria’s outstanding debt to the World Bank Group stood at $20.73bn at the end of June 2026.
The amount comprises $19.12bn owed to the International Development Association and $1.61bn owed to the International Bank for Reconstruction and Development.
The combined exposure increased by $1.34bn, or 6.93 per cent, from $19.39bn in June 2025.
World Bank exposure also increased by $907.09m between March and June 2026.
At $20.73bn, World Bank obligations accounted for about 38 per cent of Nigeria’s $54.52bn external debt at the end of June.
Nigeria’s total multilateral external debt stood at $24.76bn, representing 45.42 per cent of the country’s external debt.
The African Development Bank, African Development Fund, Islamic Development Bank and International Fund for Agricultural Development were among Nigeria’s other multilateral creditors.
Commercial creditors accounted for $23.16bn, or 42.47 per cent of external debt, with Eurobonds alone accounting for $18.55bn.
Bilateral debt stood at $6.61bn, representing 12.12 per cent of external obligations. China remained Nigeria’s largest bilateral creditor.
The proposed World Bank facilities would therefore further increase Nigeria’s borrowing from the multilateral institution if approved and subsequently disbursed.
### Atiku Demands Debt Reconciliation
The latest debt figures have also drawn criticism from former Vice-President Atiku Abubakar, who called for a reconciliation of Nigeria’s public debt.
In a statement issued by his Director of Strategic Communications, Phrank Shaibu, Atiku asked the Federal Government to account for newly recorded debt, changes in the naira value of foreign obligations and loans contracted since the Tinubu administration came into office.
He also questioned the cost of servicing the country’s growing debt burden and its implications for public spending.
Meanwhile, economist Adewale Abimbola said borrowing from multilateral institutions such as the World Bank could support development when the financing was concessional and directed towards productive projects.
He said the key issue was how borrowed funds were utilised rather than borrowing itself.
According to him, loans tied to viable projects and capable of supporting economic growth could have a positive impact, provided they were properly managed.
