By Seun Ibiyemi
The Federal Government has opened discussions with the World Bank for three new financing facilities totalling $1.5billion, even as Nigeria’s total public debt climbed to a record N166.79trillion at the end of June 2026.
The proposed World Bank financing comprises three separate $500m facilities targeting climate resilience, social protection and early childhood development.
The new borrowing plans come against the backdrop of rising public debt, with the Debt Management Office (DMO) reporting that Nigeria’s total public debt increased by N14.39trn, or 9.44 per cent, from N152.40trn in June 2025 to N166.79trn in June 2026.
In dollar terms, total public debt rose from $99.66bn to $120.93bn, representing a 21.35 per cent increase over the same period.
The most immediate of the proposed facilities 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 proposed additional financing on October 29, 2026, with the Federal Republic of Nigeria as borrower and the Federal Ministry of Environment as implementing agency.
The additional financing would increase ACReSAL’s total size from $700m to $1.2bn, entirely financed through the International Development Association (IDA), the World Bank’s concessional financing arm.
The proposed facility is designed to scale up landscape restoration, watershed rehabilitation, erosion and flood management, irrigation and drainage, water harvesting and storage, reforestation and other climate-resilient interventions.
Of the $500m proposed additional financing, $310m would go to dryland management, $165m to community climate resilience and $25m to institutional strengthening and project management.
ACReSAL currently operates across 19 northern states and the Federal Capital Territory, targeting land degradation, water insecurity, climate vulnerability and declining agricultural productivity.
The World Bank has warned that desertification and land degradation affect about 43 per cent of Nigeria’s land area, while climate change could impose significant economic losses if adaptation measures are not strengthened.
The second proposed facility is a $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project, known as HOPE-SP.
The project is still at the preparation stage, with a technical design review scheduled for October 30, 2026, and tentative World Bank board consideration set for March 16, 2027.
The Federal Ministry of Finance is listed as borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction is expected to implement the programme.
The proposed financing comprises a $420m results-based programme and an $80m investment project financing component.
The project is designed to establish sustainable social assistance for poor and vulnerable households while gradually increasing the role of federal and state budgets in financing social protection.
It would support targeted unconditional and conditional cash transfers, modernise the social registry, integrate the National Identification Number into the social protection information system and strengthen implementation at federal, state and local government levels.
The World Bank said Nigeria’s spending on social safety-net programmes was only 0.14 per cent of GDP in 2021, compared with a global average of 1.5 per cent.
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.
The third proposed facility is a $500m Nigeria Early Childhood Development programme, with tentative board consideration scheduled for March 15, 2027.
The Federal Ministry of Finance would serve as borrower, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The project would cover all 36 states and the FCT and focus on children aged zero to five.
It is designed to improve access to integrated health, nutrition, early learning, childcare, water and sanitation and related services.
The proposed financing would comprise $400m under a programme-for-results component and $100m for investment project financing, both through IDA.
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The World Bank said the intervention was necessary amid weak early-childhood development indicators, noting that 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.
The proposed loans come as Nigeria’s debt stock continued to increase during the second quarter of 2026.
The DMO reported that total public debt rose from N159.35trn in March 2026 to N166.79trn in June, representing an increase of N7.44trn, or 4.67 per cent.
Domestic debt remained the larger component at N91.59trn, representing 54.91 per cent of the total, while external debt stood at N75.20trn, or 45.09 per cent.
Domestic debt increased by N11.04tn, or 13.70 per cent, from N80.55tn in June 2025.
External debt, meanwhile, rose from $46.98bn to $54.52bn, an increase of $7.54bn or 16.05 per cent. Its naira equivalent rose from N71.85tn to N75.20trn over the same period.
A significant portion of the increase in Federal Government domestic debt came from Treasury Bills.
FGN domestic debt rose from N76.59trn in June 2025 to N87trn in June 2026, representing a N10.41trn increase.
FGN bonds remained the dominant domestic instrument at N64.84tn, accounting for 74.53 per cent of Federal Government domestic debt.
However, outstanding Nigerian Treasury Bills surged from N12.76trn to N19.48trn within one year, representing an increase of N6.72trn, or 52.64 per cent.
Between March and June 2026 alone, Treasury Bills increased by N2.92tn, or 17.60 per cent, from N16.57tn to N19.48tn.
Conventional FGN naira bonds also rose to N41.47trn, while securitised Ways and Means advances declined from N22.72trn in March to N22.11tn in June.
The proposed $1.5bn financing would further increase Nigeria’s obligations to the World Bank Group, which had outstanding exposure of $20.73bn to Nigeria as of June 2026.
The figure comprised $19.12bn owed to IDA and $1.61bn to the International Bank for Reconstruction and Development (IBRD).
World Bank exposure increased by $1.34bn, or 6.93 per cent, from $19.39bn in June 2025.
At $20.73bn, the World Bank Group accounted for about 38 per cent of Nigeria’s $54.52bn external debt at the end of June.
IDA alone accounted for roughly 35 per cent of the country’s external debt, making it Nigeria’s largest identified external creditor.
Nigeria’s total multilateral external debt stood at $24.76bn, representing 45.42 per cent of external debt, while commercial debt stood at $23.16bn.
Eurobonds accounted for $18.55bn of the commercial debt portfolio.
Bilateral debt was considerably smaller at $6.61bn, with China remaining Nigeria’s largest bilateral creditor.
The proposed $1.5bn World Bank facilities therefore come at a time when Nigeria is simultaneously seeking financing for climate adaptation, social protection and human-capital development while its overall debt stock continues to expand.
The three proposed facilities are yet to receive final World Bank board approval, meaning the stated financing amounts and timelines remain subject to the lender’s approval processes.
