World Bank Signs $500m Loan Agreement With Nigeria, Sets Strict Conditions To Release Funds
- The World Bank signed a $500 million loan agreement with Nigeria on October 6, 2026, tying access to economic reform targets
- The facility will be released in two tranches, with the lender able to cancel funds if conditions are not met
- The agreement comes amid a dispute between the World Bank and Nigeria’s finance ministry over debt interest figures
PAY ATTENTION: Mark Legit.ng as a preferred source, and our content will appear higher in your Google feed!
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The World Bank has signed a $500 million loan agreement with Nigeria, making access to the funds conditional on the federal government meeting economic reform targets and maintaining an adequate macroeconomic policy framework.
Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele signed the agreement on October 6, 2026, on behalf of Nigeria.
Source: Getty Images
The facility is part of the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing programme, which aims to improve the business environment, strengthen public revenue collection and reduce trade barriers.
The loan, provided through the International Bank for Reconstruction and Development (IBRD), forms part of a broader $1.25 billion development financing package approved by the World Bank for Nigeria in June 2026 under its Country Partnership Framework for 2026 to 2032.
How the loan will be released
The $500 million facility is divided into two withdrawal tranches of $249.375 million each, with $1.25 million allocated to a front-end fee, AriseTV reports.
The World Bank will release the first tranche only after confirming that Nigeria is implementing the programme and maintaining an adequate macroeconomic policy framework.
The second tranche requires additional evidence, including satisfactory progress on specified policy actions.
Under the agreement, the lender can cancel all or part of any undisbursed funds if Nigeria fails to address unmet conditions within 90 days of receiving formal notice. Signing the agreement does not guarantee full disbursement.
Reporting and accountability requirements
Nigeria must keep the loan proceeds in a dedicated foreign currency account and record the naira equivalent in its budget management system.
Within 30 days of withdrawing each tranche, the Federal Ministry of Finance must report to the World Bank on the amount received, the account credited with the naira equivalent and evidence that the funds were recorded in the government's budget system.
Source: Twitter
The Central Bank of Nigeria's dedicated account must also be audited by auditors acceptable to the World Bank within one month of each withdrawal.
A certified copy of each audit report must be submitted within four months and made publicly available.
The facility closes on December 31, 2027.
FG's Debt repayment
Earlier, Legit.ng reported that Nigeria’s debt service obligations surged in the final quarter of 2025, with total domestic debt service rising to N2.28 trillion, while external debt service payments stood at $1.80 billion.
The figures captured in the Debt Management Office public debt report released on Monday, April 13, revealed mounting fiscal pressures on the government, as interest payments continued to dominate debt servicing costs across both domestic and external obligations.
A breakdown indicates that FGN Naira Bonds remained the largest cost driver, with N1.32 trillion in interest payments during the quarter
Source: Legit.ng
