Nigeria’s World Bank Loans to Reach $9.65 billion by 2025 as New Borrowings Increase

Nigeria’s World Bank Loans to Reach $9.65 billion by 2025 as New Borrowings Increase

Nigeria’s total borrowing from the World Bank between 2023 and 2025 is projected to reach $9.65 billion by the end of this year, as new loans, active negotiations, and ongoing disbursements ramp up across critical sectors. When grants are included, the World Bank’s three-year support for Nigeria rises to about $9.77 billion, according to an analysis of publicly available data.

The figures cover financing from both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). While IBRD loans are issued on commercial or near-commercial terms to creditworthy countries, IDA funds are concessional—featuring low interest, long repayment periods, and, in some cases, grant components.

The surge in approvals reflects the Federal Government’s continued push to secure multilateral financing for digital infrastructure, education, social protection, power reforms, and healthcare—despite concerns about rising public debt.

Fresh $500 million Loan Expected December 2025

A key upcoming approval is a $500 million facility scheduled for World Bank Board consideration on December 19, 2025. The loan, part of the Fostering Inclusive Finance for MSMEs in Nigeria project, will be executed through the Development Bank of Nigeria.

This expected facility adds to the administration’s significant loan activity since President Bola Tinubu assumed office.

2023: $2.7 billion in Loans Anchored on Power, Education, and Women Empowerment

Nigeria kickstarted its World Bank borrowing cycle in 2023 with $2.7 billion in financing across four flagship projects, covering:

• $750 million IDA – Distributed renewable energy access
• $700 million IDA – Girls’ secondary education
• $500 million IDA – Nigeria for Women Programme (scale-up)
• $449 million IBRD + $301m IDA – Power Sector Recovery Operation

There were no grants in 2023; the entire amount was loan-based.

2024: Borrowing Jumps 57% to $4.25 billion

World Bank commitments rose sharply in 2024, reaching $4.25 billion, driven by:

• $1.5 billion – Economic Stabilisation and Reform Programme (equal split between IBRD/IDA)
• $750million IBRD – Revenue mobilisation reforms
• $500 million IDA – Rural access roads
• $500 million IDA + $70 million grant – Primary healthcare strengthening
• $500 million IDA – Dam safety & irrigation expansion

Total World Bank assistance for 2024 rises to $4.32 billion when grants are included.

2025: $2.695 billion Loan Pipeline + $52.18 million Grants

For 2025, World Bank data shows $2.695 billion in pipeline loans and an additional $52.18 million in grants across nine projects targeting:

• Digital broadband rollout – $500 million IDA
• Basic education expansion – $500 million IDA
• Livelihood and social support – $500 million IDA
• Health security, nutrition, IDP communities – $630 million IDA
• Procurement reforms – $65 million IDA
• MSME finance – $400 million IBRD + $100 million IDA
• CBN fintech oversight – $6.8 million grant

While lower than 2024’s peak, the 2025 pipeline aligns with 2023 levels.

Across the full 2023–2025 period:

• IDA loans total: $7.30 billion
• IBRD loans total: $2.35 billion
• Grants total: $122.19 million

Nigeria Remains Africa’s Largest IDA Borrower

Nigeria’s debt to the IDA rose from $17.1 billion (Sept 2024) to $18.5 billion (Sept 2025)—solidifying its position as:

• Largest IDA borrower in Africa
• Third largest globally

The World Bank’s exposure to Nigeria grew by 8.2% within one year.

Economists Split on Rising Borrowing

Economists have voiced mixed reactions to Nigeria’s increased reliance on concessional loans:

Adewale Abimbola (Economist)

• Says World Bank loans are concessionary and can be beneficial if invested in revenue-generating or economically viable projects.
• “Borrowing isn’t the issue; utilisation is,” he noted.

Dr. Aliyu Ilias (CSA Advisory)

• Warns that rising loans contradict the government’s claims of increased revenues after subsidy removal.
• Says heavy borrowing is crowding out capital spending, worsening inflation, and straining FX stability.
• Argues that Nigeria should not need to borrow at current levels.

Dr. Muda Yusuf (CPPE)

• Says borrowing is embedded in Nigeria’s budget structure and not inherently harmful.
• Emphasises debt sustainability: “The concern is whether revenue can support repayments without continuous borrowing.”

He warns against excessive foreign borrowing due to exchange rate risks.

World Bank’s Perspective: Support for Nigeria’s Reforms

The World Bank has consistently endorsed Nigeria’s reform agenda. Country Director Matthew Verghis praised the government for making “bold decisions” that could reposition the economy, reaffirming the Bank’s willingness to continue supporting ongoing reforms.

Minister of Budget and Economic Planning, Abubakar Bagudu, also urged the Bank to back the Renewed Hope Ward Development Programme, calling it vital to Nigeria’s plan to build a $1 trillion economy by 2030.

Slow Disbursement Raises Questions

Despite the growing loan portfolio, an investigation revealed that six loans worth $2bn, approved in 2024, were yet to be disbursed nearly a year later.

World Bank representative Mansir Nasir explained that:

• Disbursements are milestone-based, not released as lump sums.
• New projects must meet pre-agreed conditions before funds start flowing.

He added that detailed disbursement schedules are available on the Bank’s portal.

World Bank Now Holds 41.3% of Nigeria’s External Debt

As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, with the World Bank Group responsible for $19.39 billion (41.3%). This underscores the Bank’s central role in financing Nigeria’s development programmes.

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