The World Bank has set conditions for Nigeria to access a $500 million loan under the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing programme, requiring satisfactory progress on agreed economic reforms.
The reforms are aimed at strengthening the business environment, improving public revenue and reducing trade barriers.
According to a World Bank document seen by Nairametrics, the loan agreement was signed on behalf of Nigeria by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on October 6, 2026.
The $500 million facility, to be disbursed by the International Bank for Reconstruction and Development (IBRD), is divided into two withdrawal tranches of $249.375 million each, while $1.25 million is allocated to the front-end fee.
The facility forms part of a broader $1.25 billion development policy financing package approved by the World Bank in June 2026.
The World Bank said the release of the first tranche would depend on its satisfaction with the implementation of the programme and the adequacy of Nigeria’s macroeconomic policy framework.
For the second tranche, the bank requires evidence that Nigeria has made satisfactory progress in implementing the programme, maintained an adequate macroeconomic policy framework and completed specified policy actions.
The agreement states that the bank may cancel all or part of the undisbursed loan balance if Nigeria fails to take corrective measures acceptable to the lender within 90 days of receiving notice that the conditions have not been met.
The agreement also requires the Federal Government to maintain a dedicated foreign currency account for the loan proceeds and record the equivalent amount in its budget management system.
Within 30 days of withdrawing each tranche, the Federal Ministry of Finance must submit a report to the World Bank detailing the amount received, the account into which the naira equivalent was credited, evidence of the funds’ inclusion in the government’s budget management system, and a statement of receipts and disbursements from the dedicated account.
The dedicated account must be audited by auditors of the Central Bank of Nigeria acceptable to the World Bank within one month of each withdrawal.
A certified copy of the audit report must be submitted within four months and made publicly available in a timely manner.
The loan agreement sets December 31, 2027, as the closing date.
The World Bank approved the broader $1.25 billion Development Policy Financing package for Nigeria in June 2026, despite public criticism over the country’s rising debt profile and growing reliance on external borrowing.
The approval was part of the bank’s Country Partnership Framework for Nigeria covering 2026 to 2032.
According to the lender, the financing is intended to support reforms that strengthen the foundations for economic growth, improve competitiveness and stimulate private sector investment.
The proposed loan attracted criticism from Nigerians on social media, with some questioning the country’s increasing dependence on external borrowing and demanding greater accountability for previous World Bank loans.
The loan conditions come as the World Bank has raised concerns about Nigeria’s rising debt-servicing costs.
The bank recently reported that the Federal Government’s interest payments increased to N7.7 trillion in the first half of 2026, from N5.6 trillion in the corresponding period of 2025.
According to the World Bank, the payments amounted to 124.19 per cent of federal government revenue, while interest payments rose to 3.1 per cent of gross domestic product from 2.5 per cent a year earlier.
However, the Federal Government disputed the interpretation, arguing that the figures presented an incomplete picture of the country’s fiscal position because they excluded some government revenue and combined debt obligations across different tiers of government.
The Ministry of Finance said the ratio cited in the World Bank’s October 2026 Nigeria Development Update was misleading because it compared federal interest payments against what it described as an incomplete revenue base.
Boluwatife Enome
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