Photo File: President Bola Tinubu

The Federal Government is seeking fresh loans of $1.75bn from the World Bank even as official figures show a sharp rise in revenue collections in 2025.

According to the Special Adviser to the President on Information and Strategy, Bayo Onanuga, government revenue between January and August 2025 rose by 40.5 per cent to N20.59tn, compared to N14.6tn in the same period last year. He explained that the increase was largely driven by non-oil sources, which now account for 75 per cent of total collections, adding that the performance places the country firmly on course to meet its annual non-oil revenue target.

However, despite the revenue growth, Nigeria continues to face funding gaps in infrastructure and public services. On Wednesday, local contractors under the All Indigenous Contractors Association of Nigeria staged a protest at the Ministry of Finance in Abuja to demand payment of about N4tn owed for projects executed in 2024. The protest highlighted persistent concerns about the government’s low capital spending and heavy debt obligations.

Documents from the World Bank indicate that Nigeria is expected to secure approval for loans totalling $1.75bn before the end of the year to finance major development projects. The loans include $500m for the Nigeria Sustainable Agricultural Value-Chains for Growth project, $500m for the Building Resilient Digital Infrastructure for Growth project, $250m for the Health Security Programme in Western and Central Africa (Nigeria Phase II), and $500m for the Fostering Inclusive Finance for MSMEs project. These projects are at various stages of approval, with final endorsements expected between September and December 2025.

The move to borrow comes amid concerns about Nigeria’s growing debt profile. Data from the Debt Management Office showed that as of March 31, 2025, Nigeria owed the World Bank $18.23bn, up from $17.81bn in December 2024. This means the World Bank now accounts for about 39.7 per cent of Nigeria’s total external debt stock, which stood at $45.98bn in the first quarter of 2025, and more than 81 per cent of its total multilateral debt.

Economists remain divided on the implications of the rising loan commitments. Lagos-based economist Adewale Abimbola argued that loans from multilateral institutions such as the World Bank are largely concessional, with low interest rates and long repayment periods. He stressed that the key issue is not borrowing itself but whether the loans are tied to viable projects capable of generating medium-term revenue and strengthening public services.

On the other hand, development economist Aliyu Ilias expressed reservations about the government’s rising appetite for debt despite claims of improved revenue inflows following the removal of fuel subsidy. He recalled that when President Muhammadu Buhari left office in 2023, Nigeria’s debt stock stood at about N87tn, but has since risen to around N149tn under President Tinubu, with fears it could approach N180tn. He warned that debt servicing is already crowding out funds for capital expenditure, reducing public service delivery, limiting job creation, fuelling inflation, and weakening the naira.

Also commenting, Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, noted that while deficit financing is common globally, Nigeria must ensure its borrowing is backed by sound economic reasoning and clear development priorities. He cautioned that excessive foreign loans could heighten exchange rate risks and undermine fiscal stability, stressing that debt sustainability depends on the government’s revenue capacity to service its obligations.

The fresh World Bank loan request comes just days after President Bola Tinubu declared in Abuja that Nigeria had already met its 2025 revenue target ahead of schedule and would no longer rely on borrowing to fund its budget. Yet, with contractors demanding payment and World Bank commitments still in the pipeline, analysts say the government faces the difficult task of balancing its need for development financing with the urgent demand for fiscal discipline.