World Bank loans to Nigeria between 2023 and 2025 are expected to total $9.65 billion by the end of this year, driven by new approvals, ongoing talks, and disbursements across vital sectors.
This figure covers loans from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) only. Including grants, total World Bank support reaches about $9.77 billion over the three years.
The IBRD provides loans on commercial or near-commercial terms to middle-income and creditworthy low-income countries, while the IDA offers highly concessional loans and grants to the poorest nations.
The steady increase in loan commitments reflects government efforts in digital infrastructure, social protection, power, education, and health, emphasising the concessional nature of these borrowings.
Nigeria is set to secure an additional $500 million loan on December 19, 2025, under the Fostering Inclusive Finance for MSMEs project, to be managed by the Development Bank of Nigeria.
The borrowing under President Bola Tinubu’s administration started in 2023 with $2.7 billion in loans, focusing on power recovery, renewable energy, girls’ education, and women’s empowerment.
Notable 2023 loans included $750 million from the IDA for expanding private-sector clean energy, $700 million for girls’ secondary education, and $500 million for women’s economic empowerment. The power sector received $449 million from IBRD and $301 million from IDA to enhance electricity reliability and financial health.
In 2024, loan approvals surged by 57.4% to $4.25 billion, driven by two major policy-based programs and three $500 million IDA investment projects.
The Nigeria Reforms for Economic Stabilisation programme provided $1.5 billion in loans split equally between IBRD and IDA, aiming to create fiscal space and support vulnerable groups amid reforms. Another $750 million IBRD loan targeted resource mobilisation reforms to boost non-oil revenue.
Additional loans of $500 million each from IDA supported rural roads, primary healthcare, and dam safety. The healthcare package included a $70 million grant, bringing the total 2024 World Bank support, including grants, to around $4.32 billion.
For 2025, loan projects totalling $2.695 billion are in various stages, along with $52.18 million in grants, covering areas like financial inclusion, broadband, health, education, social protection, and institutional capacity.
Major 2025 loans include $500 million IDA for broadband expansion, basic education, and livelihood support, with $630 million for health security, nutrition, and displaced persons. Procurement reforms receive $65 million from IDA. The MSME finance programme includes $400 million IBRD and $100 million IDA components. The Central Bank of Nigeria will get a $6.8 million grant for enhancing banking oversight technologies.
Compared to 2024, the 2025 loan pipeline is about 36.6% lower but close to 2023’s level. Across three years, IDA loans total roughly $7.30 billion and IBRD loans $2.35 billion, with grants adding $122.19 million.
This portfolio highlights the scale of multilateral financing supporting Nigeria’s reform agenda amid ongoing concerns about debt sustainability and the need to boost domestic revenue.
Recent data shows Nigeria’s stock of IDA loans has risen to $18.5 billion, making it Africa’s largest IDA borrower and the third largest globally, up from fourth place in 2023.
The increase, from $17.1 billion in September 2024 to $18.5 billion in September 2025, reflects Nigeria’s growing reliance on concessional finance to fill infrastructure gaps, support reforms, and maintain social spending amid volatile oil revenues.
Economists caution that while such loans may aid long-term development, they risk worsening fiscal pressures if not paired with stronger revenue collection and careful spending.
Economist Adewale Abimbola noted that World Bank loans tend to be concessional, with below-market interest rates and longer repayment terms. He emphasised that the key is ensuring loans are well-structured and used for projects with viable revenue prospects. “Borrowing itself isn’t bad; what matters is effective utilisation,” he said.
Conversely, development economist Dr. Aliyu Ilias voiced concern over Nigeria’s growing debt, questioning the need to borrow heavily despite reported revenue surpluses following the removal of fuel subsidies and revenue gains declared by tax agencies. He argued that heavy borrowing is contributing to reduced public service delivery, higher debt servicing costs, inflation, and worsening currency depreciation.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stressed that borrowing should align with Nigeria’s Medium-Term Expenditure Framework and budget plans, and be backed by sound economic priorities. He warned that without sufficient revenue to service debt, Nigeria risks a cycle of borrowing to repay loans, increasing fiscal vulnerability. He also cautioned against excessive foreign borrowing due to exchange rate risks, advocating for disciplined debt management to avoid long-term problems.
As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, with the World Bank Group accounting for $19.39 billion—$18.04 billion from the IDA and $1.35 billion from the IBRD—representing 41.3% of total external debt.
The Minister of Budget and Economic Planning, Senator Abubakar Bagudu, recently urged the World Bank to support the Renewed Hope Ward Development Programme, a key initiative to help achieve President Tinubu’s $1 trillion economy goal by 2030. He praised the World Bank for its strong partnership during the last 28 months, describing the collaboration as both challenging and transformative.
World Bank Country Director Matthew Verghis praised Nigeria’s bold decisions to reset its development path and pledged continued support for reforms and impact enhancement.
Meanwhile, it was reported that about six World Bank loans worth $2 billion approved in 2024 had yet to be fully disbursed nearly a year later. The World Bank’s Senior External Affairs Officer, Mansir Nasir, explained that funds are released in instalments based on project milestones and financing agreements, not as lump sums. Projects must meet agreed conditions before disbursement can begin.
