The Federal Government is in discussions with the World Bank to secure three new loans worth a combined $1.5 billion, even as Nigeria’s public debt rose to a record ₦166.79 trillion at the end of June 2026.
Documents from the World Bank show that the proposed financing consists of three separate $500 million facilities targeting climate resilience, social protection and early childhood development.
The first and most immediate facility is a proposed $500 million additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes project, known as ACReSAL.
The World Bank has scheduled October 29, 2026, as the estimated date for its board to consider the proposed financing. 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 funding will increase ACReSAL’s total financing from the previously approved $700 million to $1.2 billion. The project is being financed entirely through the International Development Association, the World Bank’s concessional financing arm.
According to the project document, the Nigerian government requested the additional $500 million to expand demonstrated project results and strengthen the institutional, operational and financing arrangements required to sustain integrated landscape management.
The proposed financing is expected to support landscape restoration, watershed rehabilitation, erosion and flood control, irrigation and drainage, water harvesting and storage, reforestation and other climate-resilient interventions.
Of the additional $500 million, $310 million is proposed for dryland management, $165 million for community climate resilience and $25 million for institutional strengthening and project management.
ACReSAL currently operates across 19 northern states and the Federal Capital Territory, with its interventions focused on land degradation, water insecurity, climate vulnerability and declining agricultural productivity.
The World Bank estimates that desertification and land degradation affect about 43 per cent of Nigeria’s land area. It also warned that inadequate action on climate change could reduce Nigeria’s gross domestic product by approximately 2.6 per cent annually by 2030 and as much as 6.7 per cent by 2050.
Nigeria’s Debt Rises
The proposed borrowing comes against the backdrop of continued growth in Nigeria’s public debt.
Latest figures from the Debt Management Office show that the country’s total public debt increased by ₦14.39 trillion, from ₦152.40 trillion in June 2025 to ₦166.79 trillion by the end of June 2026.
The increase represents a 9.44 per cent year-on-year rise.
In dollar terms, however, the increase was significantly higher. Nigeria’s public debt rose by $21.27 billion, or 21.35 per cent, from $99.66 billion to $120.93 billion during the same period.
The difference in the naira and dollar growth rates was partly influenced by the exchange rate used to value the country’s external debt.
The DMO applied an official exchange rate of ₦1,379.1842 per dollar in June 2026, compared with ₦1,529.2105 per dollar a year earlier.
On a quarterly basis, Nigeria’s total debt stock increased by ₦7.44 trillion, or 4.67 per cent, from ₦159.35 trillion in March 2026 to ₦166.79 trillion in June.
In dollar terms, the debt rose by $5.98 billion, or 5.20 per cent, from $114.95 billion at the end of March 2026.
The June figures also showed that domestic liabilities remained the larger component of Nigeria’s overall debt portfolio.
Treasury Bills Drive Domestic Debt Growth
Further analysis of the Federal Government’s domestic liabilities showed increased reliance on Treasury bills and conventional naira-denominated bonds.
Federal Government domestic debt rose from ₦76.59 trillion in June 2025 to ₦87 trillion in June 2026, representing an increase of ₦10.41 trillion, or 13.60 per cent.
The domestic debt stock also increased by ₦4.12 trillion, or 4.97 per cent, during the second quarter of 2026 alone.
FGN bonds remained the largest component of the Federal Government’s domestic debt at ₦64.84 trillion, accounting for 74.53 per cent of the total.
The figure comprised ₦41.47 trillion in conventional naira bonds, ₦22.11 trillion in securitised Ways and Means advances and ₦1.27 trillion in domestic dollar bonds.
Treasury bills, however, recorded the largest absolute increase during the year.
Outstanding Nigerian Treasury Bills rose from ₦12.76 trillion in June 2025 to ₦19.48 trillion in June 2026, an increase of ₦6.72 trillion, or 52.64 per cent.
As a result, Treasury bills’ share of Federal Government domestic debt increased from 16.67 per cent to 22.39 per cent over the period.
The proposed World Bank financing would therefore add to Nigeria’s external borrowing commitments at a time when the country’s overall public debt and domestic financing requirements continue to increase.
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