World Bank raises Nigeria portfolio to $17.5bn, warns on FX reforms
The World Bank has sharply expanded its Nigerian lending operations while cautioning that reversing recent foreign exchange and monetary policies will deepen the country's poverty and deter private investment.
The World Bank has increased its financial commitments to Nigeria by 45.8 percent over the last four years. “The CPF period saw a substantial expansion of the World Bank’s portfolio in Nigeria, which increased from US$12billion in FY21 to US$17.5 billion in FY25,” the bank stated.
Between 2021 and 2025, new lending reached $12.1 billion, comprising $9.2 billion from the International Development Association and $2.9 billion from the International Bank for Reconstruction and Development. To maximize impact, the bank shifted to fewer but larger projects and cleared disbursement bottlenecks. This strategy pushed disbursement ratios from 8.6 percent in FY21 to an average above 20 percent across the following years.
Private sector exposure through the International Finance Corporation represents a critical component of this capital deployment. The IFC's committed portfolio stood at $1.6 billion across 37 clients by April 2025, making it the third-largest in Africa. Over five years, the IFC has supplied roughly $4.7 billion in long-term finance, targeting financial services, climate financing, and sectors like manufacturing and agribusiness.
Risk mitigation is handled through the broader World Bank Group Guarantee Platform, which holds a $600 million portfolio in the country. MIGA accounts for $335 million of this exposure, backing critical power infrastructure like the Azura-Edo Independent Power Project alongside newer distributed renewable energy initiatives designed to help industrial customers reduce diesel reliance.
Despite this scale of capital injection, the bank acknowledged that Nigeria's poverty rate actually rose during this period. “Though the strong engagement approach underpinning WBG support was instrumental to the achievement of CPF objectives, poor economic performance led to an increase in Nigeria’s poverty rate during the CPF period and several key human capital indicators stagnated despite substantial development support.”
For investors, the review highlights a clear macroeconomic risk: policy reversal. “Thus, safeguarding and deepening the country’s recent reforms to reignite growth will be essential for the majority of Nigerians to escape the poverty trap. Specifically, efforts will be required to: avoid reversals on recent monetary and exchange rate policy reforms; continue to strengthen oil and non-oil revenues,” the bank warned. Sustaining these reforms is presented as a non-negotiable prerequisite for the private sector-led growth needed to justify these investments.
