The Federal Government is seeking three new loans totalling $1.5 billion from the World Bank, even as Nigeria’s total public debt rose to a record N166.79 trillion as of June 2026.
Documents from the World Bank show that the proposed facilities comprise $500 million each for climate resilience, social protection and early childhood development.
The first facility, a $500 million additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) project, is expected to be presented to the World Bank board on October 29, 2026.
The Federal Republic of Nigeria is listed as the borrower, while the Federal Ministry of Environment will implement the project.
If approved, the additional financing will increase ACReSAL's total financing from $700 million to $1.2 billion, with the entire amount provided through the International Development Association (IDA), the World Bank's concessional lending arm.
According to the World Bank document, Nigeria requested the additional financing to scale up project results and strengthen the institutional, operational and financing arrangements required to sustain integrated landscape management.
The proposed funding will support landscape restoration, watershed rehabilitation, erosion and flood control, irrigation and drainage, water harvesting and storage, reforestation and other climate-resilience 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 operates in 19 northern states and the Federal Capital Territory, with a focus on land degradation, water insecurity, climate vulnerability and declining agricultural productivity.
The World Bank estimates that desertification and land degradation affect about 43 per cent of Nigeria's land area. It also projects that failure to adequately address climate change could reduce the country's gross domestic product by about 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050.
Social protection
The second proposed facility is a $500 million IDA credit for the Household Prosperity and Empowerment-Social Protection (HOPE-SP) Project.
The project is still at the preparation stage, with a technical design review scheduled for October 30, 2026. The World Bank has tentatively set March 16, 2027, for board consideration.
The Federal Ministry of Finance is listed as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction will implement the programme.
The proposed $500 million financing comprises a $420 million results-based programme and an $80 million investment project financing component.
The programme is intended to establish regular social assistance for poor and vulnerable households while gradually transferring more of the financing burden to federal and state governments.
The World Bank said the project would establish a sustainable social assistance system for poor and vulnerable households, increasingly financed from federal and state budgets and delivered through strengthened state and local government systems.
The proposed intervention includes targeted unconditional and conditional cash transfers, modernisation of the national social registry, integration of the National Identification Number into the social protection information system, and stronger implementation structures across the three tiers of government.
The World Bank noted that Nigeria spent only 0.14 per cent of GDP on social safety-net programmes in 2021, compared with a global average of 1.5 per cent and 1.2 per cent for lower-middle-income countries.
The lender also estimated 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.
It attributed the deterioration to several factors, including the COVID-19 pandemic, inflation, natural disasters and conflict. It also noted that the removal of fuel subsidies and exchange-rate reforms had increased living costs in the short term.
$500m for early childhood development
The third proposed loan is another $500 million IDA credit for the Nigeria Early Childhood Development Programme.
The project is scheduled for technical design review on October 30, 2026, with board consideration tentatively fixed for March 15, 2027.
The Federal Ministry of Finance will be the borrower, while the Federal Ministry of Budget and Economic Planning is expected to implement the programme.
The programme will cover all 36 states and the FCT and is designed to improve access to an integrated package of health, nutrition, early learning, childcare, water and sanitation services for children aged zero to five.
The proposed financing consists of a $400 million programme-for-results component and $100 million in investment project financing.
The World Bank said the intervention was necessary because 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 between 36 and 59 months attend organised early learning programmes.
It added that poor rural households bear a significant share of the burden.
Public debt rises
The proposed World Bank borrowing comes against the backdrop of a sharp increase in Nigeria's public debt.
Fresh figures from the Debt Management Office show that total public debt increased by N14.39 trillion within one year, rising from N152.40 trillion in June 2025 to N166.79 trillion in June 2026.
This represents a 9.44 per cent year-on-year increase.
In dollar terms, however, the increase was significantly higher, with public debt rising by $21.27 billion, or 21.35 per cent, from $99.66 billion to $120.93 billion.
The difference reflects, among other factors, the exchange rate used to translate the country's external debt into naira. The DMO used an official exchange rate of N1,379.1842 to the dollar in June 2026, compared with N1,529.2105/$ in June 2025.
On a quarterly basis, total public debt increased by N7.44 trillion, or 4.67 per cent, from N159.35 trillion in March to N166.79 trillion in June.
In dollar terms, the stock rose by $5.98 billion, or 5.20 per cent, from $114.95 billion at the end of March.
Domestic debt remained the larger component, at N91.59 trillion, accounting for 54.91 per cent of the total. External debt stood at N75.20 trillion, representing 45.09 per cent.
Domestic debt increased by N11.04 trillion, or 13.70 per cent, from N80.55 trillion in June 2025. In dollar terms, it rose by 26.07 per cent from $52.67 billion to $66.41 billion.
Between March and June 2026, domestic debt increased by N4.19 trillion, or 4.79 per cent, from N87.40 trillion.
External debt rose from $46.98 billion in June 2025 to $54.52 billion in June 2026, representing an increase of $7.54 billion, or 16.05 per cent.
Its naira equivalent, however, increased by N3.35 trillion, or 4.66 per cent, from N71.85 trillion to N75.20 trillion.
On a quarter-on-quarter basis, external debt increased by $2.62 billion, or 5.05 per cent, from $51.90 billion in March to $54.52 billion in June.
The Federal Government accounted for the bulk of the debt portfolio. Its domestic debt stood at N87 trillion, while states and the FCT owed N4.59 trillion domestically.
Federal Government external liabilities stood at N65.77 trillion, compared with N9.42 trillion owed externally by states and the FCT.
Treasury bills drive domestic borrowing
The DMO figures also show that Treasury bills and conventional naira bonds were major drivers of the increase in Federal Government domestic debt.
FGN domestic debt rose from N76.59 trillion in June 2025 to N87 trillion in June 2026, representing an increase of N10.41 trillion, or 13.60 per cent.
It also increased by N4.12 trillion, or 4.97 per cent, during the second quarter.
FGN bonds remained the largest component at N64.84 trillion, representing 74.53 per cent of Federal Government domestic debt.
The figure comprises N41.47 trillion in conventional naira bonds, N22.11 trillion in securitised Ways and Means advances and N1.27 trillion in domestic dollar bonds.
Treasury bills, however, recorded the biggest absolute increase.
Outstanding Nigerian Treasury Bills rose from N12.76 trillion in June 2025 to N19.48 trillion in June 2026, representing an increase of N6.72 trillion, or 52.64 per cent.
Their share of Federal Government domestic debt consequently increased from 16.67 per cent to 22.39 per cent.
The increase was particularly pronounced during the second quarter, when Treasury bills rose by N2.92 trillion, or 17.60 per cent, from N16.57 trillion in March to N19.48 trillion in June.
Conventional FGN naira bonds increased by N4.94 trillion, or 13.54 per cent, year-on-year to N41.47 trillion, and by N2 trillion, or 5.08 per cent, between March and June.
Meanwhile, securitised Ways and Means advances declined from N22.72 trillion in March to N22.11 trillion in June, representing a reduction of N613.34 billion, or 2.70 per cent.
Promissory notes also fell from N1.73 trillion in June 2025 to N1.22 trillion in June 2026, representing a 29.81 per cent decline.
FGN Savings Bonds increased by 33.78 per cent, from N91.53 billion to N122.45 billion, although they accounted for only 0.14 per cent of Federal Government domestic debt.
World Bank exposure hits $20.73bn
The latest DMO figures also highlight the growing scale of Nigeria's obligations to the World Bank Group.
Nigeria's outstanding debt to the World Bank reached $20.73 billion at the end of June 2026, comprising $19.12 billion owed to IDA and $1.61 billion to the International Bank for Reconstruction and Development (IBRD).
The exposure increased by $1.34 billion, or 6.93 per cent, from $19.39 billion in June 2025.
At the end of June 2025, Nigeria owed $18.04 billion to IDA and $1.35 billion to IBRD.
World Bank exposure also rose by $907.09 million, or 4.58 per cent, during the second quarter, from $19.82 billion in March to $20.73 billion in June.
IDA exposure increased by $733.08 million during the quarter, while IBRD debt rose by $174.01 million.
The World Bank Group's $20.73 billion exposure accounted for about 38 per cent of Nigeria's $54.52 billion 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.
Overall, Nigeria's multilateral debt stood at $24.76 billion, representing 45.42 per cent of total external debt.
Other multilateral creditors included the African Development Bank with $2.17 billion, the African Development Fund with $1.01 billion, the Islamic Development Bank with $406.41 million and the International Fund for Agricultural Development with $314.98 million.
Commercial debt stood at $23.16 billion, representing 42.47 per cent of external liabilities.
Eurobonds accounted for $18.55 billion of the commercial debt, while other obligations included $1.87 billion owed to First Abu Dhabi Bank, $835.78 million to Afreximbank and a $1.5 billion First Abu Dhabi Bank total return swap.
Bilateral debt was considerably smaller at $6.61 billion, representing 12.12 per cent of Nigeria's external debt.
China remained the largest bilateral creditor, with Nigeria owing $4.91 billion to the Export-Import Bank of China and another $573.53 million to the China Development Bank.
France was owed $906.23 million.
The composition of Nigeria's external debt has also changed over the past year. Multilateral creditors accounted for 49.36 per cent of external debt in June 2025, compared with 45.42 per cent in June 2026.
The decline in their share occurred despite the increase in nominal multilateral exposure, reflecting faster growth in other categories, particularly commercial borrowing.
Eurobond liabilities, for instance, rose from $17.32 billion in June 2025 to $18.55 billion in June 2026, alongside an increase in syndicated and other commercial obligations.
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