The World Bank has set conditions for Nigeria to entry a $500 million loan beneath the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing programme.
The loan is tied to Nigeria attaining a passable progress on agreed financial reforms, together with measures to strengthen the enterprise surroundings, enhance public income and cut back commerce boundaries.
According to the World Bank doc seen by Nairametrics, the loan agreement was signed on behalf of Nigeria by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on October 6, 2026.
Under the agreement, the $500 million loan to be disbursed by International Bank for Reconstruction and Development (IBRD) is split into two withdrawal tranches of $249.375 million every, with $1.25 million allotted to the front-end payment.
The $500 million facility is a part of the broader $1.25 billion development policy financing package approved by the World Bank in June 2026.
World Bank’s conditions for withdrawals
The first tranche is topic to the World Bank’s satisfaction with the implementation of the programme and the adequacy of Nigeria’s macroeconomic coverage framework.
The second tranche carries further necessities, together with proof that the federal government has accomplished specified coverage actions meant to advance the programme’s targets.
- “No withdrawal shall be manufactured from the First Withdrawal Tranche until the Bank is glad with the Program being carried out by the Borrower; and with the adequacy of the Borrower’s macroeconomic coverage framework.
- “No withdrawal shall be made of the Second Withdrawal Tranche unless the Bank is satisfied, after an exchange of views as described in paragraphs (a) and (b) of – 7 – Section 3.01 of Article III of this Agreement based on evidence satisfactory to the Bank: (a) with the progress achieved by the Borrower in carrying out the Program; (b) that the macroeconomic policy framework of the Borrower is adequate; and (c) that the actions described in Part B of Section I of this Schedule have been taken,” Bank acknowledged within the agreement.
The lender added that it might cancel all or a part of the undisbursed loan stability if the federal government fails to take corrective steps passable to the financial institution inside 90 days of receiving a discover that the conditions haven’t been met.
Other conditions for the loan
The agreement additionally requires Nigeria to keep up a devoted international foreign money account for the loan proceeds and account for an equal quantity in its finances administration system.
Within 30 days of withdrawing every tranche, the Federal Ministry of Finance should report back to the World Bank the quantity acquired, the account into which the naira equal was credited, proof that the funds had been recorded within the authorities’s finances administration system and an announcement of receipts and disbursements from the devoted account.
The devoted account should even be audited by auditors of the Central Bank of Nigeria acceptable to the World Bank inside one month of the withdrawal.
An authorized copy of the audit report have to be submitted inside 4 months and made publicly out there in a well timed method.
The agreement sets December 31, 2027, as the loan’s time limit.
Nigeria goes for extra loans amid public issues
Nairametrics earlier reported that the World Bank in June approved a $1.25 billion Development Policy Financing loan for Nigeria regardless of widespread public criticism over the nation’s rising debt profile.
- The lender on the time introduced that its Board had accepted the Nigeria Actions for Investment and Jobs Acceleration Development Policy Financing operation as a part of a broader Country Partnership Framework overlaying 2026 to 2032.
- The approval got here days after a lot of Nigerians criticised the proposed facility on social media, questioning the nation’s rising reliance on exterior borrowing and demanding higher accountability over earlier World Bank loans.
According to the World Bank, the $1.25 billion facility would assist reforms designed to strengthen the foundations for financial development, enhance competitiveness and stimulate non-public sector funding.
Word Bank, FG disagree over loan curiosity to income ratio
Meanwhile, the World Bank just lately flagged Nigeria’s rising curiosity cost saying the nation’s curiosity funds rose to N7.7 trillion within the first half of 2026, from N5.6 trillion within the corresponding interval of 2025.
According to the financial institution, the curiosity cost gulped 124.19 p.c of the federal authorities income. The financial institution mentioned curiosity funds elevated to three.1 p.c of gross home product (GDP) from 2.5 p.c a 12 months earlier.
However, the Nigerian government pushed back arguing that the figure presents an incomplete picture of its fiscal position as a result of it excludes some authorities income and combines debt obligations throughout completely different tiers of presidency.
According to the Ministry of Finance, the ratio cited in latest evaluation primarily based on the World Bank’s October 2026 Nigeria Development Update was deceptive as a result of it in contrast federal curiosity funds with an incomplete income base.
