By Favour Pius
The Federal Government is engaging the World Bank for a fresh $1.25 billion loan facility in what is expected to become one of the country’s largest multilateral borrowing arrangements in recent years.
Findings indicated that the proposed facility is part of ongoing efforts by the government to secure external funding support for critical reforms, infrastructure development and fiscal stabilisation amid mounting economic pressures.
The loan, if approved, would rank among the largest World Bank-backed facilities secured by Nigeria and further deepen the country’s exposure to multilateral debt obligations.
Economic analysts said the move reflects the Federal Government’s increasing reliance on concessional funding to address revenue shortfalls, support public sector financing and sustain key development programmes.
The planned borrowing also comes at a time Nigeria continues to grapple with rising debt servicing costs, foreign exchange pressures and widening fiscal deficits despite ongoing economic reforms.
Sources familiar with the discussions said the facility is expected to support priority sectors of the economy, including social intervention programmes, infrastructure and institutional reforms aimed at improving economic growth and investor confidence.
The World Bank has remained one of Nigeria’s major development partners, providing financial support for projects in power, agriculture, healthcare, education and poverty reduction.
Analysts, however, warned that while concessional loans offer lower interest rates and longer repayment periods, increasing dependence on external borrowing could worsen the country’s debt burden if not properly managed.
They urged the government to strengthen revenue generation, improve public spending efficiency and ensure that borrowed funds are channelled into productive sectors capable of generating sustainable economic returns.
Nigeria’s total public debt has continued to rise in recent years, driven by persistent budget deficits, weak revenue performance and exchange rate adjustments affecting external obligations.
