The World Bank has set December 16 as the tentative date for approving a new $1 billion Development Policy Financing loan for Nigeria under the Nigeria Actions for Investment and Jobs Acceleration (P512892) initiative.
A project document released by the bank on October 27 indicates that the facility includes a $500 million International Development Association (IDA) credit and a $500 million International Bank for Reconstruction and Development (IBRD) loan.
Falling under the Bank’s Macroeconomics, Trade, and Investment practice for Western and Central Africa, the loan aims to reinforce ongoing economic reforms, stimulate job creation, and boost private investment.
The initiative forms part of the World Bank’s wider support program intended to sustain Nigeria’s post reform stability and foster inclusive economic growth.
Implemented through the federal ministry of finance, the facility seeks to consolidate macroeconomic reforms and transition the economy from stabilisation to broad based growth, with the bank confirming that loan preparation has been cleared to move forward.
The document read, “The proposed development policy financing supports Nigeria’s pivot from stabilisation to inclusive growth and job creation.
“Structured as a two tranche standalone operation of US$1.0 billion (US$500m IDA credit and US$500m IBRD loan), it seeks to catalyse private sector led investment by expanding access to credit, deepening capital markets and digital services, easing inflationary pressures, and promoting export diversification.”
Since 2023, the country has embarked on many economic reforms, including the removal of the petrol subsidy, unification of exchange rates, and an end to central bank deficit financing.
According to the federal government, the measures, championed under president Bola Tinubu’s Renewed Hope Agenda, have helped stabilise the economy, narrow the fiscal deficit, and restore investor confidence.
But despite the improvements, growth remains sluggish, with more than 130 million Nigerians still living in poverty.
The World Bank report noted that while macroeconomic stability has returned, Nigeria’s economy has yet to shift decisively into a higher and inclusive growth path, underscoring the urgency of new investment to spur productivity, diversify exports, and create jobs.
The new policy loan is structured around two key pillars: unlocking private sector growth and lowering the cost of doing business, while expanding opportunities across agriculture, trade, and digital services.
Under the first pillar, the facility will expand access to financial credit and digital inclusion, with backing for the investment and Securities Act 2025, new credit enhancement facilities, and a Central Bank of Nigeria (CBN) Rulebook aimed at improving microfinance and non-bank financial institutions.
It also supports the national digital economy and E-Governance Bill 2025, which will provide a legal framework for electronic transactions, authentication services, and digital records, key steps toward building a modern, paperless government system.
The second pillar seeks to lower costs for firms and households, reduce inflationary pressures, and enhance export competitiveness.
The bank’s report highlights plans to simplify trade barriers, adopt AfCFTA tariff concessions, and improve certified seed systems for key crops like rice, maize, and soybeans.
This is expected to raise productivity, boost food security, and attract new private investment into the agricultural value chain.
According to the document, the $1bn DPF loan forms part of a broader FY2026 package of World Bank interventions supporting Nigeria’s growth agenda.
Other complementary projects include FINCLUDE to improve MSME financing), BRIDGE digital infrastructure, and AGROW agricultural value chain growth.
Together, these are expected to crowd in private capital, expand access to finance, and create an enabling environment for small and medium-scale enterprises.
The programme is also aligned with the Paris Climate Agreement, with components targeting climate resilient agriculture, reduced deforestation, and digital governance systems that lower emissions from paper-based processes.
The bank estimates that the policy reforms supported under this operation will help reduce food inflation, increase seed productivity, and expand digital exports, while creating millions of direct and indirect jobs.
It added that improved access to credit, particularly for MSMEs and smallholder farmers, will translate to expanded economic opportunities by creating jobs, including for the poor.
In addition, reduced import bans and lower tariffs on key inputs are expected to make goods cheaper and improve consumer welfare, while also boosting Nigeria’s competitiveness in regional markets.
Upon approval, the funds will be disbursed in two tranches as policy milestones are achieved, with implementation overseen by the federal ministry of finance in collaboration with the Central Bank of Nigeria and relevant line ministries.
The initiative is expected to anchor Nigeria’s transition from short-term stabilisation to long term, inclusive growth, potentially marking one of the largest World Bank policy support operations for the country in recent years.
As of June 30, the country’s external debt stood at $46.98bn, figures from the Debt Management Office (DMO)show.
The World Bank Group remains the country’s largest single creditor, accounting for $19.39bn comprising $18.04bn from the IDA and $1.35bn from the IBRD.
This means the bank holds 41.3 per cent of Nigeria’s total external debt, underscoring its dominant role in financing the nation’s development programmes.
Comments