The Federal Government of Nigeria is currently engaging the World Bank for a fresh $1.25 billion loan aimed at expanding access to finance, electricity, and digital services while supporting reforms in tax, trade, and agriculture. The proposed funding comes at a time when the government is pushing for stronger economic growth, private sector investment, and job creation amid ongoing reforms in the country. From my experience, this type of development financing can play an important role in economic growth if properly managed and transparently implemented.
According to a Programme Information Document obtained by Nairametrics, the facility is officially titled Nigeria Actions for Investment and Jobs Acceleration. It is structured as a Development Policy Financing operation, with the Federal Republic of Nigeria listed as the borrower and the Federal Ministry of Finance serving as the implementing agency. The proposed approval date has been fixed for June 26, 2026, while the review process has already advanced to the negotiation and appraisal stage after required prior actions were reportedly met.
The proposed loan is expected to support the Federal Government’s broader economic agenda by expanding financial inclusion, increasing electricity access, and strengthening Nigeria’s digital economy. According to the World Bank document, the programme is designed to help Nigeria move from macroeconomic stabilisation toward inclusive growth and stronger job creation. This shift is important because while some economic indicators have improved, millions of Nigerians are still struggling with rising living costs and limited economic opportunities.
The World Bank explained that the $1.25 billion operation builds on recent reforms introduced by the Nigerian government. These reforms include the removal of petrol subsidy, exchange rate unification, improved revenue administration, and the decision to halt deficit financing by the Central Bank. The financial institution noted that these measures have contributed to stronger reserves, improved investor confidence, reduced foreign exchange volatility, and better fiscal management.
The funding programme will focus on two major pillars. The first pillar aims to improve access to finance, electricity, and digital services. Under this category, the World Bank plans to support the implementation of the Investment and Securities Act 2025, credit enhancement facilities, the National Digital Economy and E-Governance Bill, a national electricity metering framework, and increased private sector participation in mini-grid electricity systems.
Related Content
From my observation, this part of the programme could have a direct impact on businesses, especially startups and small enterprises that struggle with access to credit and reliable electricity. Many business owners in Nigeria spend heavily on generators and alternative power solutions. If the electricity component of this programme is implemented effectively, it could significantly reduce operating costs and improve productivity for many entrepreneurs.
The second pillar of the proposed loan will focus on improving competitiveness through tax, trade, and agricultural reforms. This includes reducing trade barriers, improving seed supply systems for agriculture, introducing VAT e-invoicing, and implementing a minimum effective corporate tax rate. These reforms are aimed at making Nigeria’s business environment more attractive to investors while improving efficiency across key sectors of the economy.
The World Bank noted that despite progress in macroeconomic reforms since 2023, Nigeria has not yet fully moved into an inclusive growth phase. According to the institution, economic growth remains modest, while per capita income growth remains below two percent. More concerning is the report that over 139 million Nigerians, representing approximately 63 percent of the population, were still living in poverty as of 2025. This highlights the urgent need for policies that create jobs and improve living conditions.
The institution also identified several challenges slowing Nigeria’s economic growth. These include weak financial intermediation, high trade barriers, poor agricultural productivity, electricity shortages, weak transport and digital infrastructure, and governance issues. According to the report, addressing these structural problems will be necessary if Nigeria hopes to achieve its long-term target of seven percent economic growth.
However, the World Bank also flagged significant risks surrounding the proposed programme. The institution classified the operation as high risk due to political and governance concerns ahead of the 2027 general elections. Other concerns include vulnerability to oil price shocks, inflation risks linked to Middle East tensions, possible setbacks in tax reforms, election-related spending pressure, weak coordination among government agencies, and fiduciary concerns.
If approved, the $1.25 billion facility will add to the billions of dollars already approved for Nigeria under President Bola Tinubu’s administration. Reports indicate that between June 2023 and May 2026, Nigeria secured approximately $9.35 billion in World Bank loan approvals. Approval of this new loan would increase the total to roughly $10.6 billion, making it one of the largest financing relationships between Nigeria and the World Bank in recent years.
The proposed facility would also rank as the second-largest World Bank loan secured under the current administration, behind the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024. This shows the scale of Nigeria’s dependence on multilateral financing to support reforms and infrastructure needs.
Meanwhile, the Accountant-General of the Federation, Shamseldeen Babatunde Ogunjimi, recently warned that Nigeria may reconsider future World Bank loan arrangements if approval and disbursement delays continue. He stressed that these facilities are loans and not grants, meaning Nigeria remains obligated to repay them and therefore deserves faster processing of funding requests.
Ogunjimi urged the World Bank to speed up approvals and ensure timely release of funds meant for developmental priorities. According to him, unnecessary delays often slow down project implementation and reduce the intended economic impact. For many observers, this concern raises broader questions about how quickly international financing can translate into visible improvements for ordinary Nigerians.
From my experience, borrowing itself is not the problem. The real issue is how effectively borrowed funds are invested and whether they generate measurable economic returns. If this proposed loan is properly managed and focused on infrastructure, electricity, digital growth, and business reforms, it could support long-term development. However, transparency, accountability, and execution will determine whether Nigerians truly feel the impact in their daily lives.