The Federal Government led by President Bola Tinubu has opened discussions with the World Bank for three new loans totalling $1.5bn, even as Nigeria’s public debt climbed to a record N166.79tn at the end of June 2026.
Documents acquired from the World Bank indicate that the proposed financing consists of three distinct $500m facilities, covering climate resilience, social protection, and early childhood development.
The most urgent of these is a proposed $500m in additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes project, commonly referred to as ACReSAL.
The World Bank has set October 29, 2026, as the estimated date for its board to consider the proposal. The Federal Republic of Nigeria is the borrower, and the Federal Ministry of Environment serves as the implementing agency.
This financing would increase ACReSAL’s size from the previously approved $700m to $1.2bn, with the entire amount provided through the International Development Association, the World Bank’s concessional lending arm.
The document said, “The Government of Nigeria has requested AF of $500m to scale up demonstrated project results and strengthen the institutional, operational, and financing arrangements needed to sustain integrated landscape management.”
This extra funding is anticipated to back landscape restoration, watershed rehabilitation, erosion and flood control, irrigation and drainage, water harvesting and storage, reforestation, and other climate-resilient measures.
Out of the extra $500m, $310m is earmarked for dryland management, $165m for community climate resilience, and $25m for institutional strengthening and project management.
ACReSAL presently operates in 19 northern states plus the Federal Capital Territory, focusing on land degradation, water insecurity, climate vulnerability, and falling agricultural productivity.
The World Bank noted that desertification and land degradation have impacted roughly 43 percent of Nigeria’s land area and that failing to tackle climate change could cut gross domestic product by about 2.6 percent each year by 2030 and by as much as 6.7 percent by 2050.
The second proposed loan is a further $500m IDA credit for the Household Prosperity and Empowerment-Social Protection Project.
In contrast to the ACReSAL facility, the HOPE-SP project is still at an earlier stage of preparation. Its technical design review is scheduled for October 30, 2026, and the World Bank has provisionally set March 16, 2027, as the date for approval.
The Federal Ministry of Finance is named as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction will carry out the program.
The project is estimated to cost $500m, made up of a $420m results-based program and an $80m investment project financing component, with the full amount expected from IDA.
It is intended to provide regular social assistance to poor and vulnerable households while steadily transferring financing responsibility to federal and state budgets.
The World Bank document said the program would establish “a sustainable social assistance to poor and vulnerable households, financed increasingly from federal and state budgets and delivered through strengthened state and local government systems.”
The proposed program would fund targeted unconditional and conditional cash transfers, upgrade the social registry, incorporate the National Identification Number into the social protection information system, and reinforce implementation at federal, state, and local government levels.
According to the lender, Nigeria devoted just 0.14 percent of GDP to social safety-net programs in 2021, whereas the global average stood at 1.5 percent and lower-middle-income countries averaged 1.2 percent.
The bank also offered a bleak assessment of household welfare, projecting that the share of Nigerians in poverty had climbed from 40 per cent in 2019 to 56 per cent in 2023 and might hit 62.5 per cent by 2026.
It linked the decline to multiple factors, among them the pandemic, inflation, natural disasters, and conflict, and observed that the removal of fuel subsidies and exchange-rate reforms had driven up living costs in the near term.
The third proposed facility, worth $500m, targets the Nigeria Early Childhood Development program, with an estimated approval date of March 15, 2027, one day ahead of the proposed HOPE-SP approval. A technical design review for it is likewise planned for October 30, 2026.
The borrower is the Federal Ministry of Finance, while the Federal Ministry of Budget and Economic Planning is expected to carry out the program.
The project would span all 36 states and the FCT, aiming to broaden access to an integrated package of health, nutrition, early learning, childcare, water and sanitation, and other services for children from birth to age five.
Financing would come through a $500m IDA credit, made up of a $400m program-for-results component and a $100m investment project financing component.
The World Bank stated that the intervention was needed because “40 percent of children under five are stunted, fewer than half are developmentally on track, and 36 percent of children aged 36 to 59 months attend organized early learning,” with poor rural households bearing much of the burden.
The proposed borrowing coincides with new figures from the Debt Management Office showing that Nigeria’s total public debt climbed by N14.39tn in a single year, rising from N152.40tn in June 2025 to N166.79tn by the end of June 2026.
That amounted to a year-on-year rise of 9.44 percent. In dollar terms, though, the increase was far greater. Public debt surged by $21.27bn, or 21.35 per cent, from $99.66bn to $120.93bn during the same period.
The gap reflects, among other things, the stronger naira used to value the June 2026 external debt. The DMO used an official exchange rate of N1,379.1842/$ in June 2026, compared with N1,529.2105/$ a year before. As a result, dollar-denominated debt grew far more quickly than its naira equivalent.
Quarter on quarter, the debt stock rose by N7.44tn, or 4.67 percent, from N159.35tn in March 2026 to N166.79tn in June.
In dollar terms, it climbed by $5.98bn, or 5.20 percent, from $114.95bn at the close of March. The June figures indicate that domestic liabilities continued to form the larger share of the debt portfolio.
Domestic debt was N91.59tn, which accounted for 54.91 percent of total public debt, whereas external debt came to N75.20tn, or 45.09 percent. Domestic debt grew by N11.04tn, a rise of 13.70 percent, up from N80.55tn in June 2025. Measured in dollars, it rose 26.07 percent, from $52.67bn to $66.41bn.
In the period from March to June 2026 alone, domestic debt grew by N4.19tn, or 4.79 percent, from N87.40tn.
External debt went from $46.98bn in June 2025 to $54.52bn in June 2026, a gain of $7.54bn, or 16.05 per cent. Its naira value, though, grew by just N3.35tn, or 4.66 percent, moving from N71.85tn to N75.20tn owing to the exchange-rate effect.
On a quarter-on-quarter basis, external debt grew by $2.62bn, or 5.05 per cent, from $51.90bn in March to $54.52bn in June. Its naira equivalent grew by N3.25tn, or 4.51 percent.
The federal government continued to account for the overwhelming majority of the portfolio. Its domestic debt came to N87tn in June, while states and the FCT owed N4.59tn in domestic debt. Federal government external liabilities stood at N65.77tn, against N9.42tn owed externally by states and the FCT.
A closer look at the Federal Government’s domestic liabilities reveals that growth was increasingly powered by Treasury bills and conventional naira bonds.
FGN domestic debt climbed from N76.59tn in June 2025 to N87tn in June 2026, a rise of N10.41tn, or 13.60 percent. It also grew by N4.12tn, or 4.97 percent, in the second quarter alone.
FGN bonds stayed the dominant instrument at N64.84tn, making up 74.53 percent of Federal Government domestic debt. The figure comprised N41.47tn in conventional naira bonds, N22.11tn in securitized Ways and Means advances, and N1.27tn in domestic dollar bonds.
Treasury bills, however, posted the sharpest absolute expansion. Outstanding Nigerian Treasury Bills surged from N12.76tn in June 2025 to N19.48tn in June 2026, an increase of N6.72tn, or 52.64 percent, within a single year. As a result, their share of federal government domestic debt climbed from 16.67 percent to 22.39 percent.
The increase was likewise concentrated in the second quarter. Treasury bills climbed by N2.92tn, a 17.60 percent increase, moving from N16.57tn in March to N19.48tn in June. Conventional FGN naira bonds grew by N4.94tn, or 13.54 percent year-on-year, reaching N41.47tn, and rose by N2tn, or 5.08 percent, between March and June.
By contrast, the securitised Ways and Means balance fell from N22.72tn in March to N22.11tn in June, a decline of N613.34bn or 2.70 per cent. Promissory notes likewise dropped sharply, falling from N1.73tn in June 2025 to N1.22tn in June 2026, a reduction of 29.81 percent.
FGN Savings Bonds, on the other hand, gained 33.78 percent, rising from N91.53bn to N122.45bn, even though they still accounted for only 0.14 percent of domestic Federal Government debt.
