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The World Bank has approved a $1.25 billion Development Policy Financing (DPF) loan for Nigeria to support economic reforms aimed at accelerating private sector-led growth, creating jobs and strengthening the country’s business environment.
This is equivalent of N2.1 trillion at an exchange rate of N1,400/$1.
The approval, announced on Wednesday, came despite public criticism over Nigeria’s rising debt profile and growing dependence on external borrowing.
The financing is part of the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing operation and coincides with the World Bank’s adoption of a new six-year Country Partnership Framework (CPF) for Nigeria covering 2026 to 2032.
According to the global lender, the programme is designed to support Nigeria’s transition to a more inclusive and resilient economy by implementing reforms that encourage investment, improve competitiveness and expand employment opportunities.
“The World Bank Group has endorsed a new Country Partnership Framework (CPF) for Nigeria spanning 2026–2032, setting out a strategy to create more and better jobs at scale by unlocking private sector-led growth,” the bank said in a statement.
It added: “As part of this broader support, the World Bank has also approved the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing (DPF) operation, which supports Nigeria’s transition toward a more inclusive growth model that spurs growth and creates jobs.”
The approval comes just days after many Nigerians expressed concerns on social media over the proposed loan, questioning the country’s increasing debt burden and calling for greater transparency on how previous World Bank loans have been utilised.
Despite the concerns, the World Bank said the new facility would finance reforms that strengthen the foundations of economic growth rather than fund recurrent expenditure.
“The NAIJA DPF operation, which amounts to $1.25 billion, supports a set of Government reforms to strengthen the foundations for growth and competitiveness,” the statement said.
According to the bank, the reforms will focus on deepening Nigeria’s capital markets, modernising regulations governing the digital economy and electronic governance, advancing power sector reforms, reducing trade barriers in line with Nigeria’s commitments under the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (AfCFTA), improving access to quality agricultural seeds and strengthening domestic revenue mobilisation.
The financing also forms part of a broader World Bank support package that combines policy-based lending with investments in energy, agriculture, digital infrastructure, private sector development and social protection.
The bank said the package is intended to boost economic resilience, reduce poverty and encourage stronger private sector participation in Africa’s largest economy.
Alongside the loan approval, the World Bank unveiled a new Country Partnership Framework that will guide its engagement with Nigeria over the next six years.
The framework is built around expanding private investment, creating employment opportunities and addressing long-standing structural challenges that have constrained business growth and productivity.
As part of the programme, the World Bank aims to help expand electricity access to about 32 million Nigerians, provide broadband connectivity to 58 million people, improve health and nutrition services for 40 million citizens and support 9.5 million farmers through higher agricultural productivity and improved access to quality farm inputs.
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The initiative will also prioritise investments in human capital, digital infrastructure and energy access.
World Bank Country Director for Nigeria, Mathew Verghis, said the new partnership reflects the institution’s long-term commitment to supporting Nigeria’s economic transformation.
“Our new Country Partnership Framework provides the strategy for how the World Bank Group will support Nigeria over the coming years, with a strong focus on helping to create more and better jobs, particularly by enabling private sector-led growth,” Verghis said.
He acknowledged that recent macroeconomic reforms had helped stabilise the economy but stressed that deeper structural reforms would be needed to improve living standards.
“The recent macroeconomic gains have been critical to help stabilize the economy. Translating improved macroeconomic conditions into better living standards will require addressing the structural constraints to spur private sector investment and job creation,” he said.
The World Bank’s private sector financing arm, the International Finance Corporation (IFC), will play a key role in mobilising investments under the new framework.
IFC Divisional Director for Nigeria, Dahlia Khalifa, said attracting private investment would be critical to unlocking Nigeria’s long-term economic potential.
“Nigeria’s long-term growth potential will be shaped by the economy’s ability to attract investment, raise productivity, and unleash private sector job creation building on the capital of a rapidly growing population,” she said.
According to Khalifa, the framework is expected to unlock greater private investment, expand infrastructure and improve access to essential services while creating a more competitive business environment.
The Multilateral Investment Guarantee Agency (MIGA), another member of the World Bank Group, also pledged support for the programme.
MIGA Vice President and Chief Financial Officer, Ed Mountfield, said although Nigeria’s reform agenda was creating new investment opportunities, investor concerns still needed to be addressed.
“Nigeria’s reform progress is creating important opportunities for private investment, but risks remain for investors. MIGA’s role is to help manage these risks through guarantees and political risk insurance so that investors can step in with confidence,” he said.
The newly approved facility is the second-largest single World Bank loan secured by Nigeria under President Bola Tinubu’s administration, after the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation Development Policy Financing approved in June 2024.
It will be implemented by the Federal Ministry of Finance as part of the Federal Government’s broader reform agenda aimed at strengthening fiscal sustainability, expanding access to finance, improving electricity supply, promoting digital services and supporting reforms in taxation, trade and agriculture.
With the latest approval, Nigeria’s engagement with the World Bank remains central to the government’s strategy of financing economic reforms while attracting greater private investment to stimulate growth and employment.
