The Federal Government of Nigeria is seeking a new $1.75 billion loan from the World Bank to support key sectors, including agriculture, healthcare, digital infrastructure, and Micro, Small, and Medium Enterprise (MSME) financing. This move may seem counterintuitive, given the country’s revenue growth. In the first eight months of 2025, Nigeria’s revenues surged by 40.5%, driven primarily by non-oil collections, which now account for 75% of total inflows.

Economic Context

Nigeria’s economy is showing signs of resilience, with projected growth of 3.6% in 2025, up from 3.0% in 2024. The Dangote Petroleum & Petrochemicals refinery is expected to play a significant role in this growth, enabling Nigeria to become a net fuel exporter and boosting export growth. Additionally, policy reforms aimed at stabilizing the financial sector, such as the Central Bank of Nigeria’s increased capital requirements for banks, are expected to enhance financial sector resilience.

Loan Objectives

The World Bank loan is intended to support Nigeria’s development objectives, including²:
– *Agriculture*: Improving productivity and competitiveness in the sector
– *Healthcare*: Enhancing healthcare services and infrastructure
– *Digital Infrastructure*: Developing digital infrastructure to support economic growth
– *MSME Financing*: Providing financing options for micro, small, and medium enterprises

Challenges and Opportunities

Despite the revenue growth, Nigeria’s economy still faces significant challenges, including:
– High Inflation: Inflation remains a concern, with rates fluctuating in recent years
– Dependence on Oil: While non-oil collections are increasing, the country still relies heavily on oil exports
– Infrastructure Gaps: Nigeria’s infrastructure gaps, particularly in power and transportation, hinder economic growth

The loan from the World Bank could help address some of these challenges and support Nigeria’s economic development.