The World Bank has approved a $1.25 billion Development Policy Financing (DPF) loan for Nigeria despite growing public concerns over the country’s rising debt profile, while unveiling a new six-year partnership framework aimed at accelerating private sector-led economic growth and job creation.
The approval was announced on Wednesday following a meeting of the World Bank Board, which endorsed both the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing operation and a new Country Partnership Framework (CPF) covering 2026 to 2032.
The latest facility comes amid widespread criticism from many Nigerians over the government’s increasing reliance on external borrowing and calls for greater accountability in the utilisation of previous World Bank loans.
According to the World Bank, the $1.25 billion loan will support reforms designed to strengthen Nigeria’s economic competitiveness, improve the investment climate, and stimulate private sector-led growth.
The institution said the financing would help deepen Nigeria’s capital markets, modernise regulations governing the digital economy and e-governance, advance power sector reforms, reduce trade barriers under the ECOWAS and African Continental Free Trade Area (AfCFTA) frameworks, improve access to quality agricultural inputs, and strengthen domestic revenue mobilisation.
The bank noted that the financing forms part of a broader package of support combining policy-based lending with investments in energy, digital infrastructure, agriculture, social protection, and private sector development.
Alongside the loan approval, the World Bank launched its new Country Partnership Framework for Nigeria, which will guide its engagement with the country between 2026 and 2032.
Under the strategy, the bank aims to support programmes expected to provide electricity access to 32 million Nigerians, broadband connectivity to 58 million people, improved health and nutrition services for 40 million citizens, and increased agricultural productivity for 9.5 million farmers through better access to quality inputs.
The framework also seeks to strengthen human capital development while expanding investments in digital infrastructure and energy to stimulate economic growth.
World Bank Country Director for Nigeria, Mathew Verghis, said the new partnership framework would focus on creating sustainable employment by enabling private sector investment.
According to him, recent macroeconomic reforms have helped stabilise Nigeria’s economy, but sustained improvements in living standards would require addressing structural constraints limiting business growth and investment.
The World Bank also disclosed that its private sector financing arm, the International Finance Corporation, and its political risk insurance agency, Multilateral Investment Guarantee Agency, would play key roles in mobilising private investment under the new framework.
IFC Divisional Director for Nigeria, Dahlia Khalifa, said Nigeria’s long-term economic prospects depend on its ability to attract investment, improve productivity and unlock private sector job creation.
Similarly, MIGA Vice President and Chief Financial Officer, Ed Mountfield, said the agency would expand the use of guarantees and political risk insurance to encourage investments in critical sectors, including infrastructure and financial services.
The newly approved facility is the second-largest World Bank loan granted to Nigeria under the administration of Bola Ahmed Tinubu, following the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
