Advertisement
World Bank Ties $500m NAIJA Loan to Reforms as Nigeria Signs Agreement
The World Bank has attached reform conditions to a $500 million loan for Nigeria under the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing programme.
According to the loan document seen by Nairametrics, the facility requires Nigeria to show satisfactory progress on agreed economic reforms aimed at improving the business environment, boosting public revenue and lowering trade barriers.
The agreement was signed on behalf of Nigeria by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on October 6, 2026.
The $500 million loan, to be provided by the International Bank for Reconstruction and Development (IBRD), will be disbursed in two tranches of $249.375 million each, with $1.25 million set aside as front-end fee. It is part of the broader $1.25 billion development policy financing package approved by the World Bank Board in June 2026.
*Conditions for disbursement*
The World Bank said withdrawal of the first tranche is contingent on its assessment that the programme is being implemented as agreed and that Nigeria’s macroeconomic policy framework remains adequate.
For the second tranche, the government must provide evidence of progress in implementing the programme, maintain an adequate macroeconomic framework, and complete specific policy actions outlined under Part B of Section I of the agreement.
The Bank stated: “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.”
It added that if Nigeria fails to take corrective measures within 90 days of being notified of non-compliance, it may cancel all or part of the undisbursed balance.
Other conditions include maintaining a dedicated foreign currency account for the loan proceeds and reflecting an equivalent amount in the federal budget management system.
Within 30 days of each withdrawal, the Ministry of Finance is required to report to the World Bank details of the amount received, the naira account credited, evidence of budget recording, and a statement of receipts and disbursements. The dedicated account must be audited by auditors of the Central Bank of Nigeria acceptable to the Bank within one month, with a certified audit report submitted within four months and made public.
The loan’s closing date is December 31, 2027.
The facility comes amid public concerns over Nigeria’s rising debt. The World Bank recently noted that Nigeria’s interest payments rose to N7.7 trillion in H1 2026 from N5.6 trillion in H1 2025, representing 124.19% of federal revenue and 3.1% of GDP.
The Federal Government however disputed the ratio, saying it was based on incomplete revenue figures and combined debt across different tiers of government.
