…As Bank Sets New Conditions On Deal
The World Bank Group has signed an agreement with the Federal Government of Nigeria for a $500 million loan under the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing programme, being part of the broader $1.25 billion development policy financing package approved by the bank in June 2026.
In the loan agreement, which was signed on behalf of the Nigerian government on October 6 this year by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, was based on some new conditions set by the multilateral development institution.
Specifically, one of the conditions for accessing the loan by Nigeria is for the government to achieve a satisfactory progress on agreed economic reforms, namely measures to strengthen the business environment, improve public revenue and reduce trade barriers.
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Based on the terms of the agreement, the $500 million loan to be disbursed by International Bank for Reconstruction and Development (IBRD) is divided into two withdrawal tranches of $249.375 million each, with $1.25 million allocated to the front-end fee.
According to the deal, the first tranche is subject to the World Bank’s satisfaction with the implementation of the programme and the adequacy of Nigeria’s macroeconomic policy framework, while the second tranche disbursement spelt out additional requirements, including evidence that the Nigerian government has completed specified policy actions intended to advance the programme’s objectives.
The World Bank on the terms further stipulates: “No withdrawal shall be made of the First Withdrawal Tranche unless the Bank is satisfied with the Program being carried out by the Borrower; and with the adequacy of the Borrower’s macroeconomic policy 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”, it added.
The Bretton Woods development finance institution also stated it may cancel all or part of the undisbursed loan balance if the government failed to take corrective steps satisfactory to the bank within 90 days of receiving a notice that the conditions have not been met.
The pact also requires the Nigerian government to maintain a dedicated foreign currency account for the loan proceeds and account for an equivalent amount in its budget management system.
This is even as it directed that within 30 days of withdrawing each tranche, the Federal Ministry of Finance must report to the World Bank the amount received, the account into which the naira equivalent was credited, evidence that the funds were recorded in the government’s budget management system and a statement of receipts and disbursements from the dedicated account.
Also, the agreement provided that such dedicated account must also be audited by auditors of the Central Bank of Nigeria (CBN) acceptable to the World Bank within one month of the withdrawal, and that a certified copy of the audit report must be submitted within four months and made publicly available in a timely manner.
The loan’s closing date as provided for in the agreement is December 31, 2027.
