The World Bank is set to consider a fresh $1 billion Development Policy Financing (DPF) loan request from Nigeria, aimed at strengthening ongoing reforms, driving private sector investment, and accelerating job creation. According to a project document published by the global lender on October 27, the proposed facility tagged “Nigeria Actions for Investment and Jobs Acceleration (P512892)” has been tentatively scheduled for approval on December 16, 2025.
The loan, which will be implemented through the Federal Ministry of Finance, comprises a $500 million International Development Association (IDA) credit and another $500 million International Bank for Reconstruction and Development (IBRD) loan. It forms part of the World Bank’s Macroeconomics, Trade, and Investment initiative for Western and Central Africa, designed to consolidate Nigeria’s economic recovery and shift the nation from short-term stabilization to inclusive, sustainable growth.
According to Punch, which first reported the development, the World Bank has described the initiative as a key instrument to “support Nigeria’s pivot from stabilization to inclusive growth and job creation.” The Bank confirmed that preparations for the new facility have been authorized, indicating that Nigeria’s reform progress has met key preliminary benchmarks.
The $1 billion loan is structured as a two-tranche standalone operation and will focus on catalyzing private sector–led growth by expanding access to finance, deepening capital markets, promoting export diversification, and easing inflationary pressures.
The initiative follows a string of economic reforms launched since 2023 under President Bola Tinubu’s Renewed Hope Agenda, which includes the removal of petrol subsidies, the unification of exchange rates, and the cessation of deficit financing by the Central Bank of Nigeria (CBN). These bold measures have helped to restore investor confidence and narrow the fiscal deficit.
However, despite these gains, the World Bank noted that Nigeria’s economic recovery remains fragile and uneven, with over 130 million citizen’s still living in poverty. The Bank emphasized that while macroeconomic stability has largely returned, the economy “has yet to shift decisively into a higher and inclusive growth path,” stressing the need for fresh investment to spur productivity and job creation.
The proposed programme is anchored on two main pillars: Unlocking private sector growth and digital innovation and reducing the cost of doing business while enhancing export competitiveness.
Under the first pillar, the DPF facility will focus on improving financial inclusion and expanding access to credit through new credit enhancement mechanisms, reforms to the Investment and Securities Act 2025, and updates to the CBN Rulebook to strengthen non-bank and microfinance institutions. It will also support the National Digital Economy and E-Governance Bill 2025, providing a legal foundation for electronic transactions, authentication services, and digital record management crucial steps toward creating a modern, paperless governance framework.
The second pillar will target cost reduction for businesses and households, aiming to curb inflation and improve competitiveness. It includes measures to streamline trade barriers, adopt AfCFTA tariff concessions, and strengthen certified seed systems for key crops such as rice, maize, and soybeans. These interventions are expected to boost agricultural productivity, enhance food security, and attract private investment into agribusiness value chains.
The new DPF loan forms part of a larger FY2026 World Bank support package designed to sustain Nigeria’s growth momentum. Complementary projects under this framework include:
FINCLUDE- improving access to finance for MSMEs;
BRIDGE- supporting digital infrastructure expansion; and
AGROW- strengthening agricultural value chain growth.
Together, these projects aim to crowd in private capital, expand access to credit, and create millions of direct and indirect jobs, especially for smallholder farmers and youth entrepreneurs.
The Bank also highlighted that the loan aligns with the Paris Climate Agreement, as it promotes climate-resilient agriculture, combats deforestation, and enhances digital governance systems that reduce emissions from traditional, paper-based processes.
According to the World Bank, these reforms could help reduce food inflation, raise seed productivity, and expand Nigeria’s digital export potential. Improved credit access, especially for micro and small businesses, is projected to “create expanded economic opportunities for the poor,” while reduced import tariffs and trade simplifications will make goods more affordable and improve consumer welfare.
If approved, the $1 billion loan will be released in two tranches, each tied to policy milestones achieved by the government. Implementation will be jointly overseen by the Federal Ministry of Finance, the Central Bank of Nigeria, and other relevant ministries.
The initiative is expected to mark one of the largest World Bank policy support operations for Nigeria in recent years, anchoring the nation’s transition from economic stabilization to sustained, inclusive growth.
As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, according to the Debt Management Office (DMO). The World Bank remains the country’s largest single creditor, accounting for $19.39 billion made up of $18.04 billion in IDA credits and $1.35 billion in IBRD loans. This represents 41.3% of Nigeria’s total external debt, underscoring the Bank’s central role in financing Nigeria’s reform and development agenda.
While the proposed loan may help stabilize key sectors and boost job creation, experts warn that the Federal Government must ensure accountability, transparency, and reform continuity to avoid piling up unsustainable debt. The coming months will show whether Nigeria can translate this financial support into real growth, stronger institutions, and improved living standards for its citizens.
