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.

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The International Monetary Fund (IMF) has advised Nigeria to reconsider a proposed $5 billion financing arrangement with First Abu Dhabi Bank of the United Arab Emirates, warning that the transaction could expose the country to financial and transparency risks.

The caution was issued by the IMF Resident Representative in Nigeria, Christian Ebeke, who described the proposed financing structure as a complex derivatives-based instrument that may be difficult to assess due to limited transparency.

Speaking with journalists on Tuesday, Ebeke said similar transactions reviewed by the IMF in other countries often contained opaque terms, making it challenging to accurately evaluate the risks and long-term implications.

“Our view is that transactions in these types of structures carry risks. Usually they are opaque, so the terms are not always very transparent when we review these instruments across countries,” he said.

The IMF official urged the Federal Government to explore alternative financing options, including Eurobond issuances and concessional loans, rather than relying on derivative-backed funding arrangements.

The warning comes after the National Assembly approved President Bola Ahmed Tinubu’s request to secure $6 billion in external borrowing to support government spending and infrastructure development.

As part of the borrowing plan, the President sought legislative approval for a structured Total Return Swap (TRS) financing programme of up to $5 billion from First Abu Dhabi Bank.

According to Tinubu, the proposed funding is intended to support implementation of the 2026 budget, finance priority infrastructure projects and refinance existing domestic and external debt obligations.

The President also acknowledged that the additional borrowing would increase Nigeria’s public debt profile, which stood at approximately $110.3 billion, or N159.2 trillion, as of December 31, 2025.

The IMF’s intervention highlights growing concerns over the sustainability and transparency of public debt financing, particularly as developing economies seek alternative funding sources amid global economic uncertainties.

Analysts note that while structured financing arrangements can provide quick access to capital, they often require careful scrutiny to ensure they do not create hidden liabilities or expose countries to excessive financial risks.

The Federal Government has yet to officially respond to the IMF’s concerns regarding the proposed transaction.

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Governor Abdullahi Sule of Nasarawa State says Nigeria possesses enough domestic liquidity to bridge its infrastructure deficit if transparent structures are put in place to attract investors.

Sule made the statement on Thursday in Abuja while delivering the keynote address at the 2026 Infrastructure Dialogue themed “Building Nigeria’s Future: The Strategic Role of DFIs and Capital Markets in Infrastructure Financing and Economic Development.”

He argued that Nigeria’s challenge is not lack of funds, but the absence of trust-driven systems capable of mobilising and securing available capital.

Dangote Refinery Cited as Proof of Local Capital Strength

Drawing from his experience as former Group Managing Director of Dangote Refinery, the governor said Nigeria’s private sector holds significant untapped liquidity.

He pointed to the refinery as evidence that large-scale investments could be easily financed domestically if structured transparently.

“Nigeria has so much money. If they decide to sell 30 per cent of a 20-billion-dollar enterprise, that capital will be oversubscribed,” he said.

Sule explained that investors focus more on transparency, trust and returns on investment than physical assets.

Nasarawa’s Economic Transformation Strategy

The governor said Nasarawa State has applied this investment-driven model to reposition its economy from a civil service base to an emerging industrial hub.

He disclosed that an executive order requiring solid mineral companies to process raw materials locally has attracted major lithium processing investments into the state.

According to him, these policies have significantly boosted internally generated revenue, which rose from ₦7 billion in 2019 to about ₦36 billion currently.

Sule also noted that the state avoided foreign loans to reduce exposure to exchange rate risks, focusing instead on blocking leakages and expanding infrastructure to support mining and agriculture.

Experts Highlight $30 Trillion Infrastructure Gap

Convener of the dialogue and Managing Partner of Deutsche Partners Holdings, Dr Onuoha Nnachi, said Nigeria faces an estimated $30.1 trillion infrastructure deficit as of 2024.

He explained that 62 per cent of the gap lies in economic infrastructure, which can be financed by the private sector due to its commercial viability.

Nnachi stressed that government budgets alone are insufficient and recommended that the public sector prioritise social infrastructure such as education and healthcare.

Call for Private Sector-Driven Infrastructure Financing

Participants at the dialogue called for a shift toward blended finance models, green bonds and capital market instruments to close Africa’s infrastructure gap, estimated at $100 billion annually.

Governor Agbu Kefas of Taraba State, represented by Commissioner for Agriculture Prof. Nicholas Namessan, described infrastructure as the backbone of economic and social development.

He emphasized the need for stronger collaboration between government and private investors.

Security Key to Sustainable Development

The Inspector-General of Police, Olatunji Disu, represented by CP Justin Obiora, said insecurity remains a major threat to infrastructure development.

He noted that the Nigeria Police Force is adopting technology-driven policing, including surveillance systems along critical infrastructure corridors, to prevent vandalism and sabotage.

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The Federal Government has signed major contract agreements with four construction firms for the execution of strategic road projects across Nigeria, as part of efforts to accelerate infrastructure development under the Renewed Hope Agenda.

The contract signing ceremony took place on Thursday at the headquarters of the Federal Ministry of Works in Mabushi, Abuja, and covers road projects in Kaduna, Oyo, Ogun and Osun states.

According to the government, the projects are designed to improve transportation, strengthen regional connectivity and stimulate economic growth.

Road Projects Cover Kaduna, Oyo, Ogun and Osun

Minister of Works, David Umahi, said the projects represent critical national infrastructure aimed at boosting economic activity and enhancing national integration.

He explained that the administration remains committed to delivering durable road networks that will serve Nigerians for decades.

Among the awarded projects is the reconstruction of the Mando–Birnin Gwari Road in Kaduna State, awarded to J. Patel and Sons Nigeria Limited.

Also included is the dualisation of the Ibadan–Ijebu Ode Road covering Oyo and Ogun States, awarded to JRB Construction Company Limited.

In Osun State, the Osogbo–Ikirun–Akoda Road project was awarded to Truecrete Solutions Limited, while the Osogbo–Iwo–Ibadan Road was awarded to Peculiar Ultimate Concerns Limited.

FG Pushes for Long-Lasting Concrete Road Technology

Umahi stressed that the projects align with President Bola Tinubu’s campaign promises and the Renewed Hope infrastructure agenda.

He stated that the government is prioritising rigid pavement technology to ensure durability and long-term value for public investment.

“Our vision is to build roads that will last for generations,” the minister said, noting that the adoption of concrete pavement technology would enhance sustainability.

He also directed contractors to immediately mobilise to site and begin work without delay, adding that performance monitoring would be strict.

Contract Values and Technical Details Revealed

The Permanent Secretary of the Ministry, Rafiu Olarinre Adeladan, said the signing marks the completion of procurement processes and the official commencement of implementation.

Director of Highways, Construction and Rehabilitation, Clement Ogbuagu, disclosed the financial breakdown of the projects.

He said the 122-kilometre Mando–Birnin Gwari Road was awarded at ₦178.1 billion, while the 114.5-kilometre Ibadan–Ijebu Ode dualisation project was valued at ₦295.9 billion.

He added that the Osogbo–Ikirun–Akoda Road project was awarded at ₦101.8 billion, while the Osogbo–Iwo–Ibadan Road project was valued at ₦114.8 billion.

FG Targets Stronger Transport Network and Economic Growth

The Ministry said all projects will be executed using Continuously Reinforced Concrete Pavement (CRCP) technology in line with federal standards for durability and efficiency.

Officials added that the road investments form part of a broader plan to modernise Nigeria’s transport infrastructure, reduce travel challenges and support economic expansion nationwide.

The Federal Government expressed confidence that the projects will significantly improve road connectivity and enhance trade across the affected regions.

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President Bola Ahmed Tinubu has revealed that Nigeria attracted nearly $20 billion in foreign direct investments (FDI) this year, attributing the inflow to reforms introduced by his administration to improve transparency, efficiency and investor confidence.

Speaking during a panel session at the ongoing Africa CEO Forum, President Tinubu said the government’s economic reforms are gradually positioning Nigeria as a more attractive and competitive destination for investors.

“In Nigeria, we’ve attracted nearly $20 billion in direct investment this year because we are efficient, transparent and open for business,” the President said.

Tinubu Pushes Local Value Addition for Mineral Resources

The President stressed that Nigeria would no longer support the export of raw minerals without domestic value addition, noting that the country possesses the capacity to process mineral resources into finished products.

He specifically pointed to opportunities in electric vehicle manufacturing, stating that Nigeria has the resources required to produce batteries and support industrial growth.

“With our metals, we can produce batteries for cars. The private sector brings capital and expertise, but government must de-risk and create the enabling environment,” he said.

Tinubu explained that stronger collaboration between government and investors remains critical to accelerating development across Africa.

President Calls for Full Implementation of AfCFTA

The President also urged African countries to move beyond discussions and fully activate the African Continental Free Trade Area (AfCFTA).

According to him, African nations must work together and maximise the continent’s resources rather than operating in isolation.

“We have the African Continental Free Trade Area—it must not sit on the shelf. It needs to be activated properly through collaboration and effective use of resources,” Tinubu said.

He advocated an “Africa First” development strategy that prioritises local production, processing and manufacturing.

“We don’t want scavengers and extractors. We want partners who process and manufacture locally,” he added.

Dangote Refinery Shows Africa Can Deliver Large Projects

Tinubu cited the success of the Dangote Refinery as evidence that African nations can execute large-scale industrial projects when supported with the right policies.

According to him, Nigeria’s transition from dependence on imported petroleum products to becoming a net exporter demonstrates the impact of strategic government support.

“Today Nigeria is a net exporter of PMS, aviation fuel and other products. Dangote is supplying aviation fuel across Africa and to European airlines,” he said.

Tinubu Calls for African Financial Reforms

The President also questioned Africa’s continued dependence on foreign currencies for trade transactions.

He argued that conducting trade using local currencies would reduce costs and improve economic stability across the continent.

“If you produce in Nigeria, you can trade in naira. Why should African trade depend on dollars? That adds cost and instability,” he said.

Tinubu proposed an African commodity exchange platform that would allow direct trade among African countries.

He further called for the establishment of an African credit rating agency, arguing that many international rating firms do not properly understand African economic realities.

“The big American agencies dominate 95 per cent of the market, but they don’t understand our risks and opportunities,” he stated.

Nigeria Expands Digital Infrastructure

On digital development, Tinubu disclosed that Nigeria is currently laying 19,000 kilometres of fibre optic cables nationwide to improve connectivity and strengthen the digital economy.

He noted that Africa must move beyond basic telecommunications and begin investing in broader digital systems, including artificial intelligence, e-commerce, and data infrastructure.

“We need to fund Africa’s shift from basic telecoms to AI and e-commerce,” he said.

The President expressed optimism that despite current challenges, stronger cooperation and commitment among African nations would eventually drive greater economic integration.

“Pan-Africanism can’t remain a slogan. It has to be lived,” he said.

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Nigerian consumers may soon face higher banking and service charges as financial institutions adjust to the compliance demands of the country’s evolving tax regime, raising concerns that the cost of reforms could eventually be transferred to customers.

Speaking on the development, managing consultant at Pedabo, Albert Folorunsho, warned that businesses are likely to pass rising compliance costs down the value chain.

“All of these costs are going to be passed on to the customer, by either the bank that is on-lending to them or whatever the case may be,” he said.

Analysts and operators have expressed concerns that while the reforms are designed to improve revenue collection and encourage investment, they also introduce new compliance obligations that increase operational costs for businesses.

Companies are now expected to integrate tax compliance more directly into their operations, including transaction processing, reporting systems, and documentation requirements.

The reforms are supported by expanded digital reporting obligations, stricter audit mechanisms, and clearer tax treatment rules, especially in the financial and structured lending sectors.

Folorunsho explained that the shift changes how businesses interact with the tax system, making tax compliance part of day-to-day decision-making rather than a periodic obligation.

For banks and financial intermediaries, this means investing in upgraded systems, enhanced reporting frameworks, and stricter compliance processes, all of which come with additional costs.

Nigeria’s tax reform drive is aimed at improving revenue mobilisation. The country’s tax-to-GDP ratio rose to about 13.5 per cent in late 2025 from below 10 per cent in previous years, with authorities targeting 18 per cent by 2027.

Despite the improvement, the figure remains below the 15 per cent benchmark widely considered necessary to adequately fund government functions.

Compared to regional peers, Nigeria still trails behind countries such as Ghana, Kenya, and Senegal in tax revenue performance.

The reforms include measures such as consolidated development levies and targeted tax credits aimed at broadening the tax base while encouraging investment in sectors like infrastructure and energy.

However, experts warn that the additional compliance requirements could lead to higher costs across the economy.

“Costs related to tax compliance will likely be passed to customers by financial intermediaries,” Folorunsho said.

Authorities have also moved to clarify misconceptions surrounding the reforms, particularly concerns that bank account balances or transfers would be directly taxed.

“Tax is not on your account balance. The basis of calculating tax is not bank accounts,” Folorunsho explained.

Olarinde Olufemi, a member of the UN Subcommittee on Environmental Tax, also clarified that taxable income does not include account balances and that business turnover determines small business tax status.

Experts further explained that monetary gifts are not taxable where no service has been rendered in exchange.

“A gift is what you receive without any consideration. If you have just received a gift, it is not liable to tax,” Folorunsho added.

To ease implementation concerns, officials disclosed that more than 30 draft guidance notes are being finalised to simplify compliance under the new tax framework.

However, delays in issuing detailed guidelines have left many firms navigating uncertainty while trying to comply with evolving regulations.

Analysts say the reforms represent a major shift in Nigeria’s fiscal strategy, focusing more on efficiency, compliance, and wider participation rather than increasing tax rates.

Still, many believe the immediate burden of adjustment is likely to be shared across businesses and consumers through higher service charges and operational costs.

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President Bola Ahmed Tinubu has signed the ₦68.32 trillion 2026 Appropriation Bill into law, setting Nigeria’s fiscal direction for the year while extending the lifespan of the 2025 capital budget.

The newly approved budget, which took effect from April 1, prioritises economic stability, infrastructure development, national security, and inclusive growth.

According to details released by the State House, ₦4.799 trillion has been allocated for statutory transfers, while ₦15.8 trillion will go toward debt servicing. Recurrent expenditure stands at ₦15.4 trillion.

A significant ₦32.2 trillion—nearly half of the total budget—has been earmarked for capital expenditure through the Development Fund, signalling the government’s push to accelerate infrastructure projects and stimulate productivity across key sectors.

In addition, the President approved an amendment extending the implementation period of the 2025 budget’s capital component from March 31 to June 30, 2026.

The extension is expected to give Ministries, Departments, and Agencies (MDAs) more time to complete ongoing projects that are already at advanced stages, ensuring better utilisation of public funds and improved project delivery.

Officials said the move would enhance completion rates and maximise value for money, particularly in critical infrastructure and development projects nationwide.

With the 2026 budget now in force, the Federal Government is set to commence full implementation in line with its Renewed Hope Agenda.

Tinubu has directed all MDAs to adhere strictly to fiscal discipline, transparency, and efficiency in the use of allocated resources, with emphasis on timely execution and accountability.

He also commended the National Assembly for its cooperation in the swift passage of the budget, highlighting the importance of synergy between the executive and legislative arms in driving national development.

The President further assured Nigerians of his administration’s commitment to strengthening fiscal reforms, boosting revenue generation, and prioritising investments that will drive economic growth, create jobs, and enhance social protection.

The development marks a key milestone in Nigeria’s fiscal planning cycle as the government seeks to balance rising expenditure demands with long-term economic stability.

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Nigeria’s stock market witnessed a sharp decline on Tuesday as fears over a proposed 25 percent capital gains tax and renewed U.S. threats unsettled investor confidence.

Market analysts attributed the bearish trend to panic sell-offs by both institutional and retail investors seeking to secure profits ahead of the possible implementation of the tax.

The uncertainty was further compounded by reports of heightened diplomatic tension following U.S. presidential candidate Donald Trump’s warning of potential sanctions and economic strikes against nations accused of financial mismanagement, including Nigeria.

As a result, the All-Share Index recorded a notable drop, with losses in key sectors such as banking, oil and gas, and industrial goods. Market capitalization also fell significantly, reflecting declining investor sentiment.

Financial experts have urged the Federal Government to clarify its position on the capital gains tax proposal, noting that such ambiguity could drive away both local and foreign investors at a time when Nigeria’s economy is struggling to stabilize.

They also called for calm, emphasizing that reactionary policies and global uncertainties should not derail the gradual recovery of the capital market.

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