By Obinna Uballa
Nigeria’s total World Bank loans between 2023 and 2025 are projected to reach $9.65bn this December, with fresh approvals, ongoing negotiations and accelerated disbursements pushing the portfolio to one of its highest levels in recent years.
The figure – derived from International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) loans – rises to $9.77bn when grants are included, according to an analysis of World Bank data by Punch Newspaper. IDA provides highly concessional loans and grants to low-income countries, while the IBRD lends to creditworthy, middle-income nations on near-commercial terms.
The rising commitments reflect sustained government efforts to expand financing for digital infrastructure, social protection, power, education, and health, even as authorities continue to defend the concessional nature of the borrowings.
Fresh Facilities in the Pipeline
The Federal Government is expected to secure another $500m on December 19, 2025, under the Fostering Inclusive Finance for MSMEs in Nigeria project, to be implemented through the Development Bank of Nigeria.
President Bola Tinubu’s borrowing cycle began in 2023 with $2.7bn across four major World Bank-backed projects, covering power sector recovery, renewable energy, girls’ education and women’s economic empowerment.
The Distributed Access through Renewable Energy Scale-up project received $750m in IDA funding, while girls’ education secured $700m. The Nigeria for Women Programme Scale Up attracted $500m, and the power sector recovery plan received a combined $750m in IBRD and IDA financing. All 2023 disbursements were loans, as no grants were approved.
Sharp Rise in 2024 Approvals
World Bank commitments surged 57.4 per cent to $4.25bn in 2024. Two major policy-based operations – worth $1.5bn and $750m respectively – accounted for much of the increase.
The Reforms for Economic Stabilisation to Enable Transformation programme received equal shares of IBRD and IDA financing. Another $750m IBRD loan was approved for the Accelerating Resource Mobilisation Reforms initiative, aimed at boosting non-oil revenue.
Additionally, three separate $500m IDA packages supported rural road access, primary healthcare strengthening, and dam safety and irrigation. A $70m grant under the healthcare programme brought total 2024 support (including grants) to $4.32bn.
2025 Pipeline Nears $2.7bn
For 2025, identified loans amount to $2.695bn, with grants totalling $52.18m. Nine projects span broadband expansion, financial inclusion, basic education, social protection, health security, nutrition, IDP support, and procurement reforms.
Three major $500m IDA operations target broadband access, basic education, and livelihood support. Health and displacement programmes account for another $630m. A combined IBRD–IDA package worth $500m supports MSME financing, while the Central Bank of Nigeria will receive a $6.8m grant for technology-enabled financial oversight.
Although 2025 loan volumes are 36.6 per cent lower than 2024 figures, they roughly match the 2023 level of $2.7bn.
Across the three-year window, IDA loans total $7.30bn, IBRD loans $2.35bn, and grants $122.19m, up from zero in 2023.
Nigeria Now World’s 3rd-Largest IDA Debtor
The country’s growing exposure reflects a broader shift toward low-cost multilateral financing. Nigeria’s IDA debt stock climbed to $18.5bn in September 2025, up from $17.1bn a year earlier—an 8.2 per cent rise. It remains Africa’s largest IDA borrower and the third-largest globally.
Economists attribute the rise to Nigeria’s widening infrastructure gaps, weak oil revenues, and reform-linked financing needs. However, they warn that the pace of borrowing could worsen fiscal pressures without stronger domestic revenue mobilisation.
Economists Raise Red Flags
Lagos-based economist Adewale Abimbola said concessional loans are not inherently problematic, provided they are tied to viable, growth-enhancing projects. “Borrowing isn’t bad; what matters is utilisation,” he said.
But development economist Dr Aliyu Ilias criticised the government’s rising dependence on external loans despite claims of revenue surpluses from subsidy removal and improved collections by FIRS and Customs. He warned that rising debt service obligations continue to squeeze capital spending, fuel inflation and worsen FX instability.
Similarly, economist and CPPE CEO, Dr Muda Yusuf, argued that while deficit financing is standard in public finance, Nigeria’s challenge lies in sustainability. He warned that without robust revenue growth, the country risks “borrowing to service debt,” a cycle that could undermine long-term stability. He also cautioned against excessive foreign borrowing due to exchange rate risks.
World Bank Defends Processing Timelines
The World Bank clarified that disbursements are released in tranches and tied to specific milestones. This followed a report that six loans worth $2bn approved in 2024 were yet to be disbursed.
Senior External Affairs Officer, Mansir Nasir, explained that each project must meet agreed conditions before disbursement can begin.
World Bank–Nigeria Partnership Deepens
Nigeria’s external debt stood at $46.98bn as of June 2025, with the World Bank accounting for $19.39bn, or 41.3 per cent. The Minister of Budget and Economic Planning, Senator Abubakar Bagudu, recently urged the Bank to support the Renewed Hope Ward Development Programme, which he described as central to Tinubu’s ambition of building a $1tn economy by 2030.
World Bank Country Director Matthew Verghis, in August 2025, commended Nigeria for what he called “bold decisions” capable of resetting its development trajectory.
