World Bank signs $500m loan with Nigeria, ties disbursement to reforms

The World Bank has signed a $500 million loan agreement with Nigeria, making access to the funds conditional on the federal government meeting economic reform targets and maintaining an adequate macroeconomic policy framework. Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele signed the agreement on October 6, 2026, on behalf of Nigeria.

Two tranches, strict conditions

The facility is part of the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing programme. The programme aims to improve the business environment, strengthen public revenue collection and reduce trade barriers. The loan is provided through the International Bank for Reconstruction and Development (IBRD). It forms part of a broader $1.25 billion development financing package approved by the World Bank for Nigeria in June 2026 under its Country Partnership Framework for 2026 to 2032.

The $500 million facility is divided into two withdrawal tranches of $249.375 million each, with $1.25 million allocated to a front-end fee. The World Bank will release the first tranche only after confirming that Nigeria is implementing the programme and maintaining an adequate macroeconomic policy framework. The second tranche requires additional evidence, including satisfactory progress on specified policy actions.

The lender can cancel all or part of any undisbursed funds if Nigeria fails to address unmet conditions within 90 days of receiving formal notice. Signing the agreement does not guarantee full disbursement.

Reporting and audit rules

Nigeria must keep the loan proceeds in a dedicated foreign currency account and record the naira equivalent in its budget management system. Within 30 days of withdrawing each tranche, the Federal Ministry of Finance must report to the World Bank on the amount received, the account credited with the naira equivalent and evidence that the funds were recorded in the government's budget system.

The Central Bank of Nigeria's dedicated account must also be audited by auditors acceptable to the World Bank within one month of each withdrawal. A certified copy of each audit report must be submitted within four months and made publicly available. The facility closes on December 31, 2027.

Debt service pressure and dispute

The agreement comes amid a dispute between the World Bank and Nigeria's finance ministry over debt interest figures. Earlier, Nigeria's debt service obligations surged in the final quarter of 2025, with total domestic debt service rising to N2.28 trillion, while external debt service payments stood at $1.80 billion.

The figures were captured in a Debt Management Office public debt report released on Monday, April 13. They showed mounting fiscal pressures on the government, as interest payments continued to dominate debt servicing costs across both domestic and external obligations. FGN Naira Bonds remained the largest cost driver, with N1.32 trillion in interest payments during the quarter.

The loan is not automatic budget support. Disbursement depends on reforms, reporting and audits, while debt service costs remain a fiscal pressure point for the government.