World Bank approves $500m loan as Nigeria’s debt rises to $20.73bn

The World Bank has approved an additional $500m financing for Nigeria to tackle flooding, restore degraded agricultural land and reduce farmer-herder conflicts in 19 northern states and the Federal Capital Territory, amid a 44.6 per cent rise in the country’s debt to the institution under President Bola Tinubu.

The latest approval will increase Nigeria’s borrowing from the World Bank, whose outstanding loans to the country rose from $14.34bn in March 2023 to $20.73bn as of June 30, 2026, representing an increase of $6.39bn.

The additional financing was approved under the Agro-Climatic Resilience in Semi-Arid Landscapes Project, a programme designed to strengthen climate resilience, improve water management and boost agricultural productivity in vulnerable communities.

According to a statement on the World Bank’s website, the funding is expected to support the restoration of 1.4 million hectares of degraded land and benefit approximately 6.6 million people by 2031.

The intervention will also support watershed rehabilitation, erosion control, improved natural resource management and measures to reduce flooding and its associated fatalities.

The World Bank said the additional financing would help Nigeria scale up climate-resilient landscape management and strengthen rural livelihoods across the northern part of the country.

“By 2031, this fund will help restore landscapes, rehabilitate watersheds, improve erosion and flood management, and build more resilient rural livelihoods, reaching 1.4 million hectares and benefiting 6.6 million people,” the statement said.

It added that the intervention was expected to increase household incomes, reduce conflicts involving farmers, herders and communities, improve vegetation and soil health, and raise agricultural productivity.

The World Bank explained that the new funding would build on the achievements of the existing ACReSAL project, which began in 2022 to address environmental degradation and climate vulnerabilities across northern Nigeria.

According to the bank, the programme has introduced sustainable landscape management practices on approximately 550,000 hectares and reached more than 4.4 million beneficiaries.

It also said the project had exceeded its target for improved catchment management, providing a foundation for expanding climate adaptation investments.

The World Bank Country Director for Nigeria, Mathew Verghis, said the additional financing would enable the government to scale up interventions that had demonstrated positive results in vulnerable communities.

“ACReSAL has demonstrated that investments in climate-resilient landscapes can improve livelihoods, strengthen food and water security, and help communities in the parts of Nigeria most vulnerable to climate shocks,” Verghis said.

He added that the financing would help restore more degraded land, increase agricultural productivity and strengthen institutions responsible for sustaining the gains.

The bank said the programme was designed to address interconnected challenges affecting rural communities, including land degradation, declining agricultural productivity, water insecurity and competition over natural resources.

By improving access to productive land and water resources, the project is expected to reduce pressures contributing to disputes among farmers, herders and other community groups.

The ACReSAL Task Team Leader, Iganya Agene, said the additional financing would translate earlier planning and institutional reforms into larger investments capable of expanding economic opportunities.

“The additional financing reflects the strong results achieved under ACReSAL and will focus on translating the planning and institutional foundations already established under the project into larger-scale investments that improve climate adaptation, food security, water security, jobs, and economic opportunities,” Agene said.

The project is being implemented by the Federal Ministry of Environment in collaboration with the Federal Ministry of Water Resources and Sanitation and the Federal Ministry of Agriculture and Food Security.

It covers all 19 northern states and the FCT, where environmental degradation, flooding and pressure on agricultural resources continue to threaten livelihoods.

The latest approval comes about four months after the World Bank approved a $1.25bn financing package for Nigeria on June 29, 2026, under the Nigeria Actions for Investment and Jobs Acceleration programme.

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The package comprised a $750m credit from the International Development Association and a $500m loan from the International Bank for Reconstruction and Development to support economic reforms, private investment and job creation.

Meanwhile, an analysis of figures published by the Debt Management Office showed that Nigeria’s outstanding debt to the World Bank increased from $14.34bn in March 2023, shortly before Tinubu assumed office, to $20.73bn as of June 30, 2026.

The increase of $6.39bn represents a 44.6 per cent rise within the period.

The debt stock comprised $19.12bn owed to the International Development Association and $1.61bn to the International Bank for Reconstruction and Development.

The World Bank accounted for approximately 38.02 per cent of Nigeria’s total external debt stock of $54.52bn at the end of June 2026, making it the country’s largest multilateral creditor.

The PUNCH had earlier reported that the Federal Government was seeking another $500m World Bank loan to establish an infrastructure financing platform, with approval scheduled for May 25, 2027, four days before the inauguration of Nigeria’s next president.