The Federal Government has initiated a dialogue with the World Bank for three new loans summing up to $1.5bn. Nigeria already ranks as the fourth-largest debtor to the World Bank’s International Development Association (IDA), with an outstanding risk of $13b. Nigeria is number 4 globally among top borrowers from the World Bank’s concessional lending arm. Nigeria moved from ranking 5th to ranking 4th after its borrowing stock trailed countries like India and Bangladesh. Nigeria’s debt increased to a sum of N166.79tn at the end of the first half of the year.
The World Bank presented documents stating that the proposed financing comprises three projects: $500m for early child growth and development, social welfare, and climate-resilient infrastructure. The first proposed loan is $500 million in additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) project. This initiative is financed by the World Bank and aims to develop the livelihoods of the community, restore degraded land, and fight desertification in Northern Nigeria and the Federal Capital Territory (FCT). The World Bank has set the deadline for board consideration for 29 October 2026. The Federal Republic of Nigeria is the borrower, while the agency implementing the policy is the Federal Ministry of Environment.
Image Credit: ACReSAL
With the additional financing, the total funding for the ACReSAL would increase from the previously approved $700 million to $1.2 billion. The project is being funded entirely through the International Development Association (IDA), the World Bank’s arm that provides concessional financing to developing countries. According to the document, it was stated that the Nigerian government requested $500 million in addition to the previous funds to expand the achievement of projects and strengthen the financial, operational, and institutional systems required to sustain integrated landscape management. The new funding is expected to assist in various climate-resilience efforts, which include rehabilitation of watersheds, erosion and flood management, and not to exempt irrigation and drainage improvement, expansion of storage and water harvesting, and assistance in reforestation and other related interventions. From the additional $500m, $25m is budgeted for institutional strengthening and project management. $165m for climate resilience in the community and $310m.
At the moment, Agro-Climatic Resilience in Semi-Arid Landscapes is active in the Federal Capital Territory and also in 19 states in the north, with its operations focused on tackling land degradation, water shortages, climate-related risks, and reductions in agricultural productivity. As estimated by the World Bank, 43 percent of Nigeria’s land area has been affected by desertification and land degradation. It also stated that failure to identify the effects of climate change and proffer solutions could lead to a 2.6 percent loss of the country’s gross domestic product every year by 2030 and great chances of the percentage loss rising to 6.7 percent by 2050
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The second proposed loan is a $500 million International Development Association credit assigned for the Household Prosperity and Empowerment-Social Protection (HOPE-SP) project, the preparation of which is still in its early stages. Financial support to the poor and vulnerable households in the community is expected to be provided by this project and to increase the share of financial aid made available by the federal and state governments. The $500 m comprises a results-based program of $420 m and $80 m for financing investment projects. The borrower would be the federal Ministry of Finance, while the federal Ministry of Poverty Reduction and Humanitarian Affairs would supervise the implementation. October 30th, 2026, is the scheduled date for the review of the technical design, and March 16 is tentatively fixed as the date of its approval.
The third proposed loan of $500 being considered by the World Bank is for the Nigerian Early Childhood Development Programme, with an estimated approval date of March 15, 2026, a day before the proposed HOPE-SP approval. This program aims to broaden access to essential services for children from the ages of zero to five across the 36 states and the Federal Capital Territory. This program will focus on childcare, water and sanitation, healthcare and nutrition, early learning, and other support services. The project will be financed through an International Development Association credit, consisting of $400m for a program for results component and $100m investment project financing. The World Bank stated that the intervention is important because many children in Nigeria face stunted growth, limited access to organized early learning, and poor developmental outcomes, particularly in rural communities. The loan is a necessity because Nigeria’s public debt continues to rise. According to the Debt Management Office, the total public debt increased from N152.40 trillion in June 2025 to N166.79 trillion in June 2026. The debt rose by N14.39 trillion. Internal debt was the larger share of the country’s debt, standing atN91.59 trillion, while external debt was N75.20 trillion. In total, the figures indicate that Nigeria’s debt burden continues to increase even as the government considers borrowing more funds for development programs.
