World Bank Ties $500m NAIJA Loan to Reforms as Nigeria Signs Agreement

World Bank Ties$500m NAIJA Loan to Reforms as Nigeria Signs Agreement

The World Bank has actually connected reform conditions to a $500 million loan for Nigeria under the Nigeria Actions for Investment and Jobs Acceleration(NAIJA) Development Policy Financing program.

According to the loan file seen by Nairametrics, the center needs Nigeria to reveal satisfying development on predetermined financial reforms targeted at enhancing business environment, enhancing public earnings and decreasing trade barriers.

The contract was signed on behalf of Nigeria by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on October 6, 2026.

The $500 million loan, to be offered by the International Bank for Reconstruction and Development (IBRD), will be paid out in 2 tranches of $249.375 million each, with $1.25 million reserved as front-end cost. It becomes part of the more comprehensive $1.25 billion advancement policy funding bundle authorized by the World Bank Board in June 2026.

* Conditions for dispensation *

The World Bank stated withdrawal of the very first tranche is contingent on its evaluation that the program is being carried out as agreed which Nigeria’s macroeconomic policy structure stays appropriate.

For the 2nd tranche, the federal government needs to supply proof of development in carrying out the program, keep an appropriate macroeconomic structure, and total particular policy actions laid out under Part B of Section I of the contract.

The Bank specified: “No withdrawal will be made from the First Withdrawal Tranche unless the Bank is pleased with the Program being performed by the Borrower; and with the adequacy of the Borrower’s macroeconomic policy structure.”

It included that if Nigeria stops working to take restorative steps within 90 days of being informed of non-compliance, it might cancel all or part of the undisbursed balance.

Other conditions consist of preserving a devoted foreign currency represent the loan earnings and showing a comparable quantity in the federal budget plan management system.

Within 30 days of each withdrawal, the Ministry of Finance is needed to report to the World Bank information of the quantity got, the naira account credited, proof of budget plan recording, and a declaration of invoices and dispensations. The devoted account needs to be examined by auditors of the Central Bank of Nigeria appropriate to the Bank within one month, with a licensed audit report sent within 4 months and revealed.

The loan’s closing date is December 31, 2027.

The center comes amidst public issues over Nigeria’s increasing financial obligation. The World Bank just recently kept in mind that Nigeria’s interest payments increased to N7.7 trillion in H1 2026 from N5.6 trillion in H1 2025, representing 124.19% of federal profits and 3.1% of GDP.

The Federal Government nevertheless contested the ratio, stating it was based upon insufficient income figures and combined financial obligation throughout various tiers of federal government.