MON JULY 06 2026-theGBJournal| Nigeria’s mounting debt burden is set to deepen after the World Bank approved a fresh $1.25 billion Development Policy Financing (DPF) facility, extending financial support for the government’s reform agenda even as concerns intensify over the country’s growing dependence on external borrowing, rising debt-servicing costs and the long-term sustainability of public finances.
The financing package was announced alongside the launch of the World Bank’s Country Partnership Framework (CPF) for Nigeria covering 2026 to 2032, a six-year strategy designed to accelerate private sector-led economic growth, create jobs and improve access to essential services.
The new facility adds to Nigeria’s expanding stock of multilateral debt at a time when the country continues to rely heavily on concessional financing to support fiscal reforms, infrastructure investment and social spending.
The World Bank said the new partnership framework is intended to consolidate the gains from Nigeria’s recent macroeconomic reforms by promoting policies that encourage private investment, strengthen the business environment and improve public sector efficiency.
Under the framework, the lender plans to support reforms aimed at deepening Nigeria’s capital markets, modernising regulations governing the digital economy, expanding e-governance and improving access to electricity, digital infrastructure and agricultural services.
The institution believes these measures will help unlock private capital, raise productivity and stimulate employment across key sectors of the economy.
The programme sets ambitious development targets over the next six years, including expanding electricity access to 32 million Nigerians, extending broadband connectivity to 58 million people, improving health and nutrition services for 40 million citizens, and providing agricultural support to approximately 9.5 million farmers.
The latest approval underscores the World Bank’s continued backing of President Bola Tinubu’s economic reform programme, which has included exchange-rate liberalisation, fuel subsidy removal and fiscal adjustments intended to restore macroeconomic stability and attract investment.
However, the new financing is also likely to reignite debate over Nigeria’s rising public debt profile.
Although multilateral loans generally carry lower interest rates and longer repayment periods than commercial borrowing, economists have repeatedly cautioned that continued accumulation of external debt increases future repayment obligations and places additional pressure on government revenues, particularly as debt-service costs continue to consume a significant share of fiscal resources.
The World Bank has consistently argued that sustained structural reforms, stronger domestic revenue mobilisation and greater private-sector participation will be critical if Nigeria is to translate borrowing into higher economic growth, broader job creation and improved living standards.
The success of the new financing package, analysts say, will ultimately depend on the government’s ability to implement reforms effectively while ensuring that additional debt generates measurable economic returns rather than further straining the country’s already fragile fiscal position.
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