The World Bank has earmarked December 16 as a tentative date to approve a $1 billion Development Policy Financing (DPF) loan to Nigeria under a new initiative titled “Nigeria Actions for Investment and Jobs Acceleration (P512892).”
According to a project document released by the bank on October 27, 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 area for Western and Central Africa, the programme is aimed at strengthening economic reforms, boosting job creation, and accelerating private sector investment.
The proposed loan is part of a broader World Bank support package intended to consolidate Nigeria’s post-reform stability and foster inclusive growth across key sectors of the economy. It will be implemented through the Federal Ministry of Finance, with the bank confirming that “the loan preparation process has been authorised to proceed.”
“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,” the document read.
Since 2023, Nigeria has pursued key reforms, including the removal of the petrol subsidy, the unification of exchange rates, and an end to central bank deficit financing.
The Federal Government, under President Bola Tinubu’s Renewed Hope Agenda, says these measures have stabilised the economy, narrowed the fiscal deficit, and restored investor confidence. However, growth remains sluggish, with more than 130 million Nigerians still living in poverty.
The World Bank noted that while macroeconomic stability has returned, “Nigeria’s economy has yet to shift decisively into a higher and inclusive growth path,” highlighting the urgency of new investments to boost productivity, diversify exports, and generate jobs.
The $1 billion DPF loan is structured around two pillars: unlocking private sector growth and reducing the cost of doing business, while expanding opportunities in agriculture, trade, and digital services.
Under the first pillar, the facility will expand access to financial credit and digital inclusion, supporting the Investment and Securities Act 2025, new credit enhancement facilities, and a CBN Rulebook aimed at improving microfinance and non-bank financial institutions.
It also backs the National Digital Economy and E-Governance Bill 2025, which provides a legal framework for electronic transactions, authentication services, and digital records.
The second pillar focuses on lowering costs for firms and households, easing inflationary pressures, and enhancing export competitiveness.
The bank plans to simplify trade barriers, adopt AfCFTA tariff concessions, and improve certified seed systems for crops like rice, maize, and soybeans, boosting productivity, food security, and private investment in agriculture.
The $1 billion loan is part of a broader FY2026 World Bank package, which includes FINCLUDE (MSME financing), BRIDGE (digital infrastructure), and AGROW (agricultural value chain growth), aimed at catalysing private capital, expanding access to finance, and supporting small and medium-scale enterprises.
Aligned with the Paris Climate Agreement, the programme includes climate-resilient agriculture, reduced deforestation, and digital governance systems to lower emissions.
The World Bank expects the reforms under this operation to reduce food inflation, raise seed productivity, expand digital exports, and create millions of direct and indirect jobs.
Improved access to credit for MSMEs and smallholder farmers is expected to “expand economic opportunities by creating jobs, including for the poor.”
READ ALSO: NELFUND Opens Student Loan Portal
Additionally, reduced import bans and lower tariffs on key inputs are expected to make goods more affordable, improve consumer welfare, and strengthen Nigeria’s regional competitiveness.
Funds will be disbursed in two tranches as policy milestones are met, with oversight by the Federal Ministry of Finance in collaboration with the Central Bank of Nigeria and relevant ministries.
The initiative aims to guide Nigeria from short-term economic stabilisation to long-term inclusive growth, marking one of the World Bank’s largest policy support operations for the country in recent years.
As of June 30, 2025, Nigeria’s external debt stood at $46.98 billion, according to the Debt Management Office.
The World Bank Group remains the largest single creditor, holding $19.39 billion ($18.04 billion from IDA and $1.35 billion from IBRD), representing 41.3 percent of Nigeria’s total external debt and underscoring its key role in financing national development programmes.
