The World Bank Group has tentatively scheduled 16 December 2025 as the approval date for a proposed US$1 billion Development Policy Financing (DPF) operation in favor of the Federal Republic of Nigeria, under a new initiative titled “Nigeria Actions for Investment and Jobs Acceleration (P512892).”
According to the Project Information Document published by the Bank on 27 October 2025, the proposed financing package consists of a US$500 million credit from the International Development Association (IDA) and a US$500 million loan from the International Bank for Reconstruction and Development (IBRD).
The facility, which falls within the Bank’s Macroeconomics, Trade, and Investment Global Practice for the Western and Central Africa Region, is intended to reinforce Nigeria’s ongoing macroeconomic reforms, catalyze private sector investment, and promote sustainable job creation.
The proposed operation forms part of the Bank’s broader strategic support aimed at consolidating post-reform macroeconomic stability and facilitating inclusive growth across key sectors of the Nigerian economy.
Implementation responsibility shall rest with the Federal Ministry of Finance, with the World Bank confirming that the loan preparation process has been duly authorized and is proceeding in accordance with its internal review framework.
“The proposed Development Policy Financing supports Nigeria’s transition from economic stabilization to inclusive growth and job creation. Structured as a two-tranche standalone operation of US$1.0 billion (US$500 million IDA credit and US$500 million IBRD loan), it seeks to catalyze private sector–led investment by expanding access to credit, deepening capital markets and digital services, easing inflationary pressures, and promoting export diversification,”
the project document stated.
Background and Rationale
Since 2023, the Federal Government of Nigeria has implemented several fiscal and structural reforms, including the removal of the petroleum subsidy, unification of exchange rates, and cessation of deficit financing by the Central Bank of Nigeria (CBN).
According to the Government, these measures—implemented under President Bola Ahmed Tinubu’s Renewed Hope Agenda—have contributed to restoring macroeconomic stability, narrowing the fiscal deficit, and improving investor confidence.
However, despite these reforms, the World Bank observed that “Nigeria’s economy has yet to shift decisively into a higher and more inclusive growth trajectory,” with more than 130 million citizens still living below the poverty line.
Structure and Policy Pillars
The DPF is structured around two primary policy pillars:
Unlocking private sector growth and lowering the cost of doing business, and
Expanding opportunities in agriculture, trade, and digital services.
Pillar I – Enabling Private Investment
Under the first pillar, the operation aims to expand access to finance and promote digital inclusion through legal and institutional reforms. These include:
Support for the Investment and Securities Act 2025,
Establishment of new credit enhancement facilities,
Implementation of a CBN Rulebook to strengthen the regulation of microfinance and non-bank financial institutions, and
Passage of the National Digital Economy and E-Governance Bill 2025, providing a legal framework for electronic transactions, authentication services, and digital record management.
These measures are expected to enhance investor confidence, strengthen financial market integrity, and modernize Nigeria’s digital governance architecture.
Pillar II – Reducing Costs and Enhancing Competitiveness
The second pillar seeks to reduce inflationary pressures, lower production costs, and improve Nigeria’s export competitiveness through:
Streamlining of trade barriers and adoption of AfCFTA tariff concessions,
Reform of agricultural input systems, and
Strengthening of certified seed production for strategic crops such as rice, maize, and soybeans.
These reforms are designed to improve food security, enhance agricultural productivity, and attract new investment into agro-industrial value chains.
Complementary Programs
The proposed US$1 billion DPF forms part of a wider FY2026 Country Partnership Framework comprising several complementary initiatives, including:
FINCLUDE – enhancing micro, small, and medium enterprise (MSME) financing,
BRIDGE – expanding digital infrastructure and connectivity, and
AGROW – promoting agricultural value chain development.
Together, these programs aim to mobilize private capital, increase access to credit, and strengthen the enabling environment for enterprise development.
The initiative also aligns with the Paris Climate Agreement, incorporating components to promote climate-resilient agriculture, reduce deforestation, and expand digital governance systems that lower emissions associated with paper-based processes.
Expected Outcomes
According to World Bank projections, the policy actions supported under the DPF are expected to:
Reduce food inflation and improve agricultural productivity,
Expand digital exports and financial inclusion,
Generate millions of direct and indirect employment opportunities, and
Improve welfare outcomes by lowering consumer prices through reduced import bans and tariff adjustments.
Upon approval, disbursement will occur in two tranches, conditional upon verified completion of policy milestones. Oversight of implementation will be coordinated by the Federal Ministry of Finance, in collaboration with the Central Bank of Nigeria and other relevant ministries, departments, and agencies.
The facility is expected to serve as a cornerstone for Nigeria’s transition from short-term macroeconomic stabilization to long-term, inclusive economic growth, representing one of the largest single policy-based support operations extended to the country in recent years.
Debt Position
As of 30 June 2025, Nigeria’s total external debt stood at US$46.98 billion, according to data from the Debt Management Office (DMO). The World Bank Group remains Nigeria’s largest single creditor, with a portfolio of US$19.39 billion (comprising US$18.04 billion in IDA credits and US$1.35 billion in IBRD loans), representing approximately 41.3 percent of the country’s total external obligations.
This underscores the Bank’s central role in financing Nigeria’s ongoing development and reform agenda.#newsafro_
