The Federal Government is seeking a new $1.75bn loan from the World Bank to support key development projects, even as revenue collections have risen by more than 40 per cent in the first eight months of 2025.
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Revenue rise
Figures released by the Presidency on Wednesday showed that total collections reached N20.59tn between January and August 2025, up from N14.6tn in the same period of 2024. According to Special Adviser to the President on Information and Strategy, Bayo Onanuga, non-oil revenues now account for 75 per cent of the total.
The statement read, “From January to August 2025, total collections reached N20.59tn, a 40.5 per cent increase from N14.6tn recorded in 2024. This strong performance aligns with projections, placing the government firmly on course to achieve its annual non-oil revenue target.”
Despite this performance, funding gaps remain in capital projects. On Wednesday, the All Indigenous Contractors Association of Nigeria staged a protest at the Ministry of Finance in Abuja, demanding payment of about N4tn owed for projects executed in 2024.
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Loan approvals in view
Documents from the World Bank’s website show that the institution is expected to approve four new loans for Nigeria before the end of 2025. These total $1.75bn and cover agriculture, digital infrastructure, health, and small business finance.
- The Nigeria Sustainable Agricultural Value-Chains for Growth project will receive $500m. Approval is expected on 11 December 2025.
- The Building Resilient Digital Infrastructure for Growth project is allocated $500m, with approval scheduled for 31 October 2025.
- The Health Security Programme in Western and Central Africa, Nigeria – Phase II will receive $250m, with approval expected on 30 September 2025.
- The Fostering Inclusive Finance for MSMEs in Nigeria project is set to get $500m, with approval due on 18 December 2025.
These commitments follow $8.40bn in loans already approved for Nigeria between June 2023 and August 2025.
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Nigeria’s debt profile
Data from the Debt Management Office show that Nigeria’s debt to the World Bank stood at $18.23bn as of March 2025. This represents 39.7 per cent of the country’s $45.98bn external debt. Borrowings from the International Development Association rose to $16.99bn, while exposure to the International Bank for Reconstruction and Development remained at $1.24bn.
The World Bank now accounts for more than 81 per cent of Nigeria’s total multilateral debt, up from 79.8 per cent at the end of 2024.
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Economists react
Economist Adewale Abimbola said loans from multilateral lenders are concessionary, with lower interest rates and longer repayment terms. He added that the issue is not borrowing itself but the use of the funds. “If it’s concessionary and tied to viable projects with medium-term revenue prospects, I don’t think it’s a bad idea,” he said. “Borrowing isn’t bad; what matters is utilisation.”
Development economist Aliyu Ilias raised concerns about rising debt levels. He noted that Nigeria’s debt stock grew from about N87tn under former President Muhammadu Buhari to around N149tn under President Bola Tinubu, with fears it could reach N180tn.
He questioned the need for further borrowing given rising revenues. According to him, debt servicing is crowding out capital spending, limiting job creation and worsening foreign exchange pressures.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said borrowing should be assessed within the government’s Medium-Term Expenditure Framework. He stressed that deficit financing is common globally but sustainability depends on Nigeria’s ability to generate enough revenue to repay. He warned that foreign loans carry exchange rate risks and could weaken reserves if not carefully managed.
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Balancing priorities
While revenues have increased, the government faces competing pressures: funding infrastructure, meeting contractors’ demands, and keeping debt sustainable. The World Bank loans, if approved, would fund projects in agriculture, health, and technology, sectors seen as important for long-term growth.
Economists agree that the effectiveness of the loans will depend on how well they are managed and whether they contribute to building revenue streams that can support repayment in the years ahead.
