The Federal Government has begun talks with the World Bank for three new loans amounting to $1.5 billion, even as Nigeria’s total public debt reached a record N166.79 trillion at the end of June 2026.
Documents from the lender show the proposed package consists of three separate $500 million facilities targeting climate resilience, social protection and early childhood development.
Climate Resilience Expansion
The most advanced request is $500 million in additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) project. The World Bank has scheduled its board for consideration around 29 October 2026. The Federal Republic of Nigeria is the borrower, with the Federal Ministry of Environment as the implementing agency.
If approved, the additional funding would increase ACReSAL’s total size from the previously approved $700 million to $1.2 billion, all from the International Development Association, the World Bank’s concessional arm. The government has requested the extra resources to scale up proven results and strengthen the institutional and financing arrangements needed for sustained integrated landscape management.
The new money would support landscape restoration, watershed rehabilitation, erosion and flood control, irrigation and drainage, water harvesting, reforestation and related climate-resilient measures. Of the $500 million, $310 million is earmarked for dryland management, $165 million for community climate resilience and $25 million for institutional strengthening and project management.
ACReSAL currently covers 19 northern states and the Federal Capital Territory. It addresses land degradation, water insecurity, climate vulnerability and falling agricultural productivity. The World Bank notes that desertification and land degradation affect an estimated 43 per cent of Nigeria’s land area, and that unchecked climate change could reduce GDP by about 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050.
Social Protection Programme
The second proposed facility is a $500 million IDA credit for the Household Prosperity and Empowerment–Social Protection Project (HOPE-SP). This programme is at an earlier stage of preparation. Its technical design review is expected on 30 October 2026, with tentative board approval set for 16 March 2027. The Federal Ministry of Finance is the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction will implement it.
The $500 million package comprises a $420 million results-based programme and an $80 million investment project financing component. It aims to create regular social assistance for poor and vulnerable households while gradually shifting more of the financing burden onto federal and state budgets. Planned activities include targeted cash transfers, modernisation of the social registry, integration of the National Identification Number into the social-protection information system, and stronger delivery capacity at federal, state and local levels.
The World Bank observes that Nigeria spent only 0.14 per cent of GDP on social safety-net programmes in 2021, well below the global average of 1.5 per cent and the 1.2 per cent average for lower-middle-income countries. It estimates that the share 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, citing the pandemic, inflation, natural disasters, conflict, and the short-term impact of fuel-subsidy removal and exchange-rate reforms.
Early Childhood Development
The third $500 million facility is for the Nigeria Early Childhood Development programme, with an estimated approval date of 15 March 2027—one day before the proposed HOPE-SP decision. Its technical design review is also scheduled for 30 October 2026. The Federal Ministry of Finance is the borrower and the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The project would cover all 36 states and the FCT. It seeks to expand access to an integrated package of health, nutrition, early learning, childcare, water and sanitation and related services for children aged zero to five. Financing would consist of a $400 million programme-for-results component and a $100 million investment project financing component.
The World Bank highlights that 40 per cent of 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, with the heaviest burden falling on poor rural households.
Rising Public Debt Context
The proposed borrowing comes as Debt Management Office figures show Nigeria’s total public debt rose by N14.39 trillion, or 9.44 per cent, from N152.40 trillion in June 2025 to N166.79 trillion at the end of June 2026. In dollar terms the increase was larger $21.27 billion, or 21.35 per cent from $99.66 billion to $120.93 billion. The difference largely reflects the stronger naira exchange rate used to value external debt in 2026.
On a quarterly basis the stock rose by N7.44 trillion, or 4.67 per cent, from March to June. Domestic debt stood at N91.59 trillion (54.91 per cent of the total), while external debt was N75.20 trillion (45.09 per cent). Domestic liabilities grew faster, driven especially by a sharp rise in outstanding Treasury bills, which jumped 52.64 per cent year-on-year to N19.48 trillion.
Nigeria’s outstanding debt to the World Bank Group reached $20.73 billion at end-June 2026 ($19.12 billion to IDA and $1.61 billion to IBRD), equivalent to about 38 per cent of the country’s entire external debt stock. IDA remains Nigeria’s single largest identified external creditor.
Former Vice-President Atiku Abubakar has called for a full reconciliation of the debt figures and questioned the continued rise in borrowing. Lagos-based economist Adewale Abimbola noted that World Bank loans are generally concessional, with lower interest rates and longer tenors, and argued that the key issue is effective utilisation rather than the act of borrowing itself.
