The Federal Government has initiated discussions with the World Bank for a new $1.25 billion loan under a new programme designed to boost funding for critical sectors of the economy, including merchandize trade and agriculture.
The facility, which is titled “Nigeria Actions for Investment and Jobs Acceleration” has been listed as a Development Policy Financing operation, with the Federal Republic of Nigeria as borrower and the Federal Ministry of Finance as implementing agency.
A World Bank Programme Information Document on the proposed loan showed that the proposed approval date for the facility had been set for June 26 this year and the review had authorised the negotiating team to proceed with appraisal and negotiation after incorporating guidance and receiving legal evidence for prior actions met.
According to the document, the proposed development objective is to support the government’s efforts to expand access to finance, digital and electricity services as well as facilitate competitiveness through tax, trade and agriculture reforms.
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The financing of the programme is structured as a standalone Development Policy Financing operation and is expected to support the country’s shift from macroeconomic stabilisation to inclusive growth, job creation and sustainable development.
The World Bank document partly clarified on the purpose of the loan thus: “The proposed Development Policy Financing (DPF) supports reforms initiated by the Government aimed at pivoting from stabilization to inclusive growth and job creation. The $1.25 billion standalone operation builds on recent progress in restoring stability and underpins the Government’s shift toward an inclusive growth model.”
The Washington D.C-based development finance institution maintained that the programme would consolidate the recent stabilisation gains and supports Nigeria’s long-term growth target of 7% growth, anchored on a private sector-led and public sector-facilitated strategy.
It disclosed that the first pillar of the programme would focus on access to finance, digital services and electricity, support the Investment and Securities Act 2025, operationalisation of credit enhancement facilities, adoption of the National Digital Economy and E-Governance Bill, a national metering framework and private participation in interconnected mini-grids.
The World Bank Programme Information Document also reflected that the programme’s second pillar will focus on competitiveness through trade, tax and agriculture reforms, including reducing trade barriers, improving seed supply, VAT e-invoicing and a minimum effective corporate tax rate.
The bank recalled Nigeria had implemented major reforms since 2023, including the removal of the petrol subsidy, unification of the exchange rate, halting of central bank deficit financing and strengthening of revenue administration, noting that the reform measures have helped to restore stability, improve revenues, reduced the deficit financing gap, ease debt pressure, grow reserves, reduce FX volatility and improve investor confidence, among other gains.
Despite the gains, the multilateral finance institution noted that Nigeria had not yet moved into a higher and inclusive growth path, as the recorded growth remains modest, per capita income is merely increasing by less than 2%, and 63% of Nigerians, over 139 million people, remained in poverty in 2025.
The World Bank Programme Information Document identified shallow financial intermediation, weak competition, high trade barriers, low-productivity agriculture, infrastructure gaps in power, transport and digital connectivity, and weak governance as constraints to boosting the nation’s economic growth.
The World Bank rated the overall risk of the new operation as high based on the political and governance risks ahead of the 2027 elections, macroeconomic risks from oil price vulnerability, inflationary pressure from a prolonged Middle East conflict, possible setbacks in revenue reforms, election-related spending, weak coordination among MDAs, fiduciary risks, and social risks around trade reforms.
