Proposed World Bank financing targets climate resilience, social protection and early childhood development as Nigeria’s public debt rises by N14.39tn in one year

The Federal Government of Nigeria is in discussions with the World Bank for three new loans totalling $1.5 billion, even as the country’s total public debt climbed to a record N166.79 trillion at the end of June 2026.

Documents from the World Bank show that the proposed financing comprises three separate $500 million facilities focused on climate resilience, social protection and early childhood development.

All three facilities are expected to be financed through the International Development Association (IDA), the World Bank’s concessional lending arm.

The most advanced of the proposed loans is an additional $500 million for the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) project, which is scheduled for consideration by the World Bank’s Board on October 29, 2026.

The Federal Republic of Nigeria is listed as the borrower, while the Federal Ministry of Environment will serve as the implementing agency.

If approved, the additional financing would increase the total funding for ACReSAL from the previously approved $700 million to $1.2 billion.

According to the World Bank, the Federal Government requested the additional funding to scale up results already achieved under the programme and strengthen the institutional, operational and financial arrangements required to sustain integrated landscape management.

Under the proposed financing, about $310 million would go towards dryland management, $165 million to community climate resilience, while $25 million would be allocated to institutional strengthening and project management.

The funds are expected to support landscape restoration, watershed rehabilitation, erosion and flood control, irrigation, water harvesting, reforestation and other climate-resilience measures.

ACReSAL currently operates across 19 northern states and the Federal Capital Territory.

The World Bank estimates that desertification and land degradation affect about 43 per cent of Nigeria’s land area, warning that the economic impact of climate change could become increasingly severe without stronger adaptation measures.

The Bank estimates that climate change could reduce Nigeria’s gross domestic product by about 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050.

$500m Social Protection Loan

The second proposed facility is another $500 million IDA credit for the Household Prosperity and Empowerment-Social Protection (HOPE-SP) project.

The project is still at an earlier preparation stage, with a technical design review scheduled for October 30, 2026, while tentative World Bank Board approval is expected on March 16, 2027.

The Federal Ministry of Finance is listed as the borrower, while the Federal Ministry of Humanitarian Affairs and Poverty Reduction is expected to implement the programme.

The proposed financing would consist of a $420 million results-based programme and an $80 million investment project financing component.

The project is designed to establish regular social assistance for poor and vulnerable households while gradually increasing the role of federal and state governments in financing social protection programmes.

Planned interventions include targeted cash transfers, modernisation of Nigeria’s social registry, integration of the National Identification Number (NIN) into the social protection system and improvements in the capacity of government institutions to deliver assistance.

The World Bank noted that Nigeria spent only 0.14 per cent of GDP on social safety nets in 2021, compared with a global average of 1.5 per cent and an average of 1.2 per cent for lower-middle-income countries.

The Bank also estimated that the proportion of Nigerians living in poverty increased from 40 per cent in 2019 to 56 per cent in 2023, with the figure potentially reaching 62.5 per cent in 2026.

It attributed the worsening conditions to a combination of factors, including the COVID-19 pandemic, inflation, natural disasters, conflict, fuel subsidy removal and exchange-rate reforms.

Another $500m for Early Childhood Development

The third proposed facility is a $500 million IDA credit for the Nigeria Early Childhood Development Programme.

Like the HOPE-SP project, its technical design review is scheduled for October 30, 2026. The World Bank has estimated March 15, 2027 for consideration of the project by its Board.

The Federal Ministry of Finance would serve as the borrower, while the Federal Ministry of Budget and Economic Planning would implement the programme.

The programme is designed to operate across all 36 states and the FCT, with a focus on expanding access to an integrated package of health, nutrition, early learning, childcare, water and sanitation services for children aged zero to five years.

The proposed financing would include a $400 million programme-for-results component and a $100 million investment project financing component.

The World Bank said the programme is aimed at addressing significant challenges affecting Nigerian children, noting that about 40 per cent of children under five are stunted, fewer than half are developmentally on track, and only 36 per cent of children aged 36 to 59 months participate in organised early learning.

The Bank said poor and rural households bear a disproportionate share of the challenges.

Public Debt Climbs to N166.79tn

The proposed new borrowing comes against the backdrop of a sharp increase in Nigeria’s public debt.

Fresh figures from the Debt Management Office (DMO) show that the country’s total public debt rose from N152.40 trillion in June 2025 to N166.79 trillion by June 2026.

That represents an increase of N14.39 trillion, or 9.44 per cent, within one year.

In dollar terms, the increase was larger, rising from $99.66 billion to $120.93 billion, representing an increase of $21.27 billion, or 21.35 per cent.

The difference between the naira and dollar growth rates was partly linked to the exchange rate used to value Nigeria’s external debt.

The naira was valued at N1,379.1842 to the dollar in June 2026, compared with N1,529.2105 per dollar in June 2025.

On a quarterly basis, Nigeria’s total public debt increased by N7.44 trillion, or 4.67 per cent, from N159.35 trillion in March 2026.

Domestic debt remained the larger component of the total debt stock, standing at N91.59 trillion, representing 54.91 per cent.

External debt accounted for N75.20 trillion, or 45.09 per cent of the total.

Domestic liabilities increased by N11.04 trillion, or 13.70 per cent, year-on-year.

External debt, meanwhile, increased by $7.54 billion, or 16.05 per cent, in dollar terms. However, measured in naira, the increase was N3.35 trillion, or 4.66 per cent, reflecting the impact of exchange-rate movements.

The proposed World Bank facilities would therefore add to Nigeria’s borrowing commitments if approved, although the loans are designed to finance specific development and social programmes across the country.