The World Bank has approved a fresh $1.25 billion loan for Nigeria, greenlighting a development policy financing operation that supporters say will accelerate jobs and economic reform but that critics warn will deepen the country’s already swelling external debt burden. The approval, announced on Wednesday alongside a new six-year Country Partnership Framework for 2026 to 2032, is the second-largest single World Bank facility secured by the administration of President Bola Tinubu and comes despite weeks of public backlash over Nigeria’s trajectory of increasing external borrowing.
What the World Bank approved and why
Wednesday’s announcement from the World Bank marks the formal approval of the “Nigeria Actions for Investment and Jobs Acceleration” Development Policy Financing operation, commonly abbreviated NAIJA DPF, worth $1.25 billion.
Punch’s report on the approval quotes the World Bank’s official statement directly: the operation “supports a set of Government reforms to strengthen the foundations for growth and competitiveness,” with disbursements contingent on progress across six reform pillars. These are: deepening capital markets through innovative credit enhancement mechanisms; modernizing the regulatory framework for the digital economy and e-governance; advancing power sector reforms to accelerate electrification; lowering trade barriers consistent with Nigeria’s ECOWAS and African Continental Free Trade Area (AfCFTA) commitments; improving access to quality agricultural seeds; and strengthening domestic revenue mobilization.
Legit.ng’s earlier pre-approval coverage, drawing on World Bank planning documents obtained by Channels Television, described the loan as tied to six existing government programs: FINCLUDE (financial inclusion), BRIDGE (digital economy), AGROW (agriculture), ARMOR (economic resilience), DARES (digital and regulatory environment strengthening) and a power sector operation. The Federal Ministry of Finance is designated as the implementing authority, with the World Bank’s Board of Executive Directors having cleared the final hurdles to sign off on the facility.
A new 2026–2032 Country Partnership Framework
The NAIJA DPF was not approved in isolation. It was unveiled alongside a new World Bank Group Country Partnership Framework covering 2026 to 2032, which defines how the institution will deploy its full toolkit, lending, investment guarantees and advisory services, across Nigeria’s economy over the next six years.
The World Bank’s statement, cited extensively by Punch, describes the framework’s overarching ambition: “to create more and better jobs at scale by unlocking private sector-led growth.” In concrete terms, it sets targets that illustrate the scale of Nigeria’s development gaps and the bank’s proposed contribution: expanding electricity access to 32 million Nigerians; providing broadband connectivity to 58 million people; improving health and nutrition services for 40 million citizens; and supporting 9.5 million farmers.
The framework also seeks to strengthen human capital through education and skills programs, boost agricultural productivity and expand access to energy and digital infrastructure beyond the headline targets. Mathew Verghis, World Bank Country Director for Nigeria, said the new framework provides “a strong focus on helping to create more and better jobs, particularly by enabling private sector-led growth,” adding that “translating improved macroeconomic conditions into better living standards will require addressing the structural constraints to spur private sector investment and job creation.”
Tinubu’s record borrowing: context and scale
The NAIJA DPF sits within a much larger and rapidly growing picture of Nigerian borrowing from multilateral institutions.
Punch’s reporting traces the scale: between June 2023 and May 2026, the World Bank approved approximately $9.35 billion for Nigeria across various sectors. With the $1.25 billion NAIJA DPF now approved, total World Bank commitments to Nigeria under Tinubu will rise to approximately $10.6 billion.
This compares with a single prior high-water mark under the same administration: the $1.5 billion Reforms for Economic Stabilization to Enable Transformation Development Policy Financing (RESET DPF) approved in June 2024 remains the largest single World Bank facility under Tinubu. The NAIJA DPF is second on that list.
Figures from Nigeria’s Debt Management Office (DMO), cited by Punch, put total external debt at $51.86 billion as of December 31, 2025. Of that, World Bank debt stood at $19.89 billion, or 38.36 percent of total external liabilities, up from $17.81 billion at the end of 2024. The increase of $2.08 billion, or 11.7 percent in one year, tells its own story about the pace of multilateral borrowing under the current government.
Within that World Bank portfolio, International Development Association (IDA) loans, typically concessional, aimed at lower-income countries, make up the bulk, rising from $16.56 billion to $18.51 billion over the same period, while International Bank for Reconstruction and Development (IBRD) debt grew from $1.24 billion to $1.38 billion.
Public backlash: “more debt, less development”
The loan was approved despite significant public opposition, which Punch describes as an “ongoing backlash” that preceded the World Bank’s board vote.
Civil society organizations and some prominent economists have consistently criticized the rising external debt of Nigeria, arguing that it has not reflected on the improved living standards of the ordinary Nigerians. Inflation is still high, youth unemployment is high, the naira has lost a lot of value since the unification of exchange rates and basic services from electricity to healthcare are unreliable for most citizens.
Opposition voices also raised concerns about the timing of the loan approval, coming close to Nigeria’s general elections scheduled for 2027. Legit.ng flagged this in its pre-approval coverage, noting that the loan was being sought “close to Nigeria’s elections,” a period in which critics argue that large financial commitments carry political risks and may be used to pad the government’s fiscal position rather than fund structural reform.
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P.M. News, one of several outlets that tracked negotiations before approval, reported that concerns about debt sustainability had been raised at the World Bank’s own consultative stages, though the institution ultimately endorsed Nigeria’s reform progress as sufficient grounds for approval.
IFC and MIGA: private investment and political risk insurance
Beyond the World Bank’s own lending arm, two other parts of the World Bank Group added their voices, and tools, to the NAIJA framework.
Dahlia Khalifa, IFC Divisional Director for Nigeria, said that “Nigeria’s reform agenda had created opportunities to attract greater private investment,” adding that the country’s “long-term growth potential will be shaped by the economy’s ability to attract investment, raise productivity, and unleash private sector job creation, building on the capital of a rapidly growing population.” The IFC’s role is to mobilize private capital alongside public lending, in effect, using the World Bank’s endorsement to encourage multinationals and regional investors to put money into Nigeria.
Ed Mountfield, MIGA’s Vice-President and Chief Financial Officer, acknowledged that risks remain. “Nigeria’s reform progress is creating important opportunities for private investment, but risks remain for investors. MIGA’s role is to help manage these risks, through guarantees and political risk insurance, so that investors can step in with confidence,” he said. MIGA’s guarantees are designed to cover non-commercial risks such as expropriation, currency inconvertibility and breach of contract, reducing barriers for businesses that might otherwise hesitate to invest in a volatile environment.
Together, the IFC and MIGA components suggest the World Bank Group is betting that the Nigeria DPF will be a catalyst, a public financing signal that unlocks private flows, rather than a standalone project.
The reform pillars: what changes must happen for funds to flow
Development Policy Financing works differently from project loans: rather than funding a specific infrastructure build, a DPF disburses in tranches contingent on a government implementing agreed policy reforms.
For NAIJA, the six pillars, capital market deepening, digital economy modernization, electricity sector reform, trade liberalization under ECOWAS and AfCFTA, agricultural seed access, and domestic revenue mobilization, represent a cross-cutting reform agenda that the World Bank believes would, if implemented, strengthen the structural foundations for sustainable growth.
Separately, the IMF in a June 2026 report supported “further electricity reforms to tackle subsidies,” warning that “current tariffs create significant financial losses and fiscal risks,” highlighting how closely multilateral institutions engaged with Nigeria watch electricity and energy pricing reform.
What the loan means for Nigeria in 2026
The approval of the $1.25 billion NAIJA DPF is a milestone that simultaneously reflects confidence and concern.
On the confidence side, the World Bank’s willingness to lend at this scale signals that it views Tinubu’s reform program, the unification of the naira exchange rate, removal of the fuel subsidy, fiscal consolidation, and the ongoing push to expand tax revenues, as credible enough to support. The 2026–2032 framework extends that bet over six years, anchoring a long-term partnership rather than a one-off transaction.
On the worry side, Nigeria’s total external debt is close to $52 billion, with World Bank exposure alone close to $20 billion. This raises real questions about sustainability, especially in a world where borrowing costs remain high and commodity-dependent revenues are subject to swings in oil prices.
For the 220 million Nigerians whose daily lives are the ultimate measure of whether loans translate into outcomes, the test will be practical: Do reforms unlock electricity 24 hours a day in more communities? Does broadband connect more schools and small businesses? Do agricultural inputs reach smallholder farmers? And does job creation keep pace with a population growing by more than six million people a year?
If the answer is yes, the NAIJA DPF will become a case study in how multilateral finance can bridge a reforming government’s ambitions and the structural constraints standing between macro stabilization and genuine development. If the answer is no, critics’ warnings about debt without development will prove prescient, and the $1.25 billion will become another line in a ledger that ordinary Nigerians feel they are paying but not yet benefiting from.