As IDA21 launches, Nigeria pushes to shift focus from stabilisation to jobs and inclusive growth
By Boluwatife Oshadiya | February 26, 2026
Key Points
• IDA20 mobilised $97.4 billion in concessional financing for the world’s poorest countries, including Nigeria.
• Nine million vulnerable Nigerian households have received direct cash transfers under reform-backed social protection programmes.
• Over 12 million Nigerians were enrolled through digital ID integration, with women accounting for nearly 60 percent.
• Nigeria implemented exchange rate unification, fuel subsidy removal, and ended deficit monetisation during the IDA20 cycle.
• The Federal Government describes IDA as a “unique partnership,” with Nigeria serving as both recipient and contributing donor.
Nigeria’s economic reform programme and social protection expansion took centre stage on Wednesday as the Honourable Minister of Finance and Coordinating Minister of the Economy, Wale Edun, delivered the keynote address at the International Development Association (IDA20) Retrospective Launch hosted by the World Bank Group.
The event, themed “Lessons from IDA20: Delivering Impact in Times of Crisis,” reviewed outcomes from IDA20, the twentieth replenishment of the International Development Association, which mobilised $97.4 billion in concessional financing to support the world’s poorest and most vulnerable countries.
In his remarks, Edun said nine million of Nigeria’s poorest households have received direct cash transfers under the Federal Government’s social protection reforms, implemented during a period of significant macroeconomic restructuring.
The minister noted that more than 12 million Nigerians were enrolled through digital ID integration to support the transparency and targeting of government interventions. Women accounted for nearly 60 percent of those enrolled – a statistic officials say reflects deliberate gender inclusion in programme design.
IDA20 was launched in the aftermath of the COVID-19 pandemic, global supply chain disruptions, rising food insecurity, and tightening global financial conditions. According to the World Bank, the replenishment focused on crisis response, climate resilience, fragility, governance reforms, and debt sustainability across low-income countries.
Edun described Nigeria’s reform path during the IDA20 cycle as decisive, citing exchange rate unification, the removal of petrol subsidies, and the end of deficit monetisation – commonly referred to as Ways and Means financing as cornerstone reforms undertaken during the period. IDA’s Development Policy Operations, he said, provided both financial resources and technical support at critical moments.
Nigeria remains one of IDA’s largest borrowers in Sub-Saharan Africa. At the same time, the country contributes to IDA replenishment cycles, positioning it as both a beneficiary and stakeholder in the multilateral financing architecture.
The World Bank has consistently described IDA as its primary instrument for assisting low-income countries through grants and low-interest loans with long maturities. IDA resources are replenished every three years by donor contributions, borrower repayments, and market borrowings.
The Issues
Reform Amid Crisis
IDA20 was negotiated during a period when many low-income countries were facing debt distress, rising inflation, and constrained fiscal space. For Nigeria, the reform cycle coincided with historically high inflation, currency volatility, and pressure on public finances.
Exchange rate unification aimed at eliminating multiple foreign exchange windows, was designed to improve transparency and restore investor confidence. However, the adjustment contributed to short-term inflationary pressures as import costs rose.
Similarly, fuel subsidy removal significantly reduced fiscal leakages but triggered cost-of-living increases, particularly for transport and food.
The structural question remains whether concessional financing can cushion reform shocks sufficiently to maintain social stability while macroeconomic adjustments take effect.
Social Protection and Targeting Efficiency
Cash transfers are widely regarded by development economists as one of the most efficient poverty-reduction tools when accurately targeted. The integration of digital ID systems seeks to reduce ghost beneficiaries and improve payment verification.
Nigeria’s progress in enrolling over 12 million individuals into digital identification-linked programmes marks a shift toward data-driven governance. However, independent assessments have previously flagged challenges around broadband penetration, rural verification logistics, and financial inclusion gaps.
Nigeria’s Dual Role in IDA
Nigeria’s status as both recipient and contributing donor to IDA introduces a strategic dimension. While concessional financing supports domestic development priorities, Nigeria also participates in shaping the global agenda on climate finance, fragility, and growth in Africa.
This dual role raises broader questions about fiscal sustainability, debt management, and long-term reliance on multilateral concessional resources amid domestic revenue mobilisation reforms.
What’s Being Said
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria, said the scale of the cash transfer programme reflected the impact of reforms backed by IDA financing.
“Nine million poorest households have received direct cash transfers. When identification is secure and transparent, leakages decline, trust improves, and opportunity expands.”
On the broader reform agenda, Edun framed Nigeria’s decisions during the IDA20 cycle as a deliberate and difficult choice.
“Nigeria faced mounting pressure but chose reform over retreat.”
On the strategic value of multilateral financing, Edun said the IDA20 cycle validated Nigeria’s reform-first approach.
“IDA20 demonstrated how pooled concessional financing aligned with country priorities can reduce fragmentation, strengthen policy coherence and support responsible reform.”
Ajay Banga, President of the World Bank Group, has previously emphasised the importance of crisis-responsive financing for vulnerable countries.
“IDA is one of the most effective tools the world has to support countries facing poverty, fragility and climate shocks.”
Development economist and former World Bank adviser Dr. Amina Ibrahim added that digital ID integration is a structural reform with compounding benefits.
“Once you clean up identification systems, you reduce leakages not just in cash transfers but across procurement, taxation and subsidy frameworks.”
What’s Next
• The next IDA replenishment cycle (IDA21) is expected to prioritise climate adaptation, energy transition, and fragile state support, with negotiations ongoing among donor countries.
• Nigeria’s Ministry of Finance is expected to release updated social protection performance data in the second quarter of 2026.
• The National Assembly’s review of public debt sustainability metrics could influence future borrowing strategies tied to concessional financing.
• Multilateral partners are expected to evaluate Nigeria’s reform benchmarks ahead of subsequent Development Policy Operations.
The Bottom Line
Nigeria’s IDA20 experience underscores a central economic reality: structural reform without social cushioning risks instability, but social spending without reform risks fiscal collapse. By pairing exchange rate unification and subsidy removal with digitally targeted cash transfers, the government is attempting to navigate both constraints simultaneously. Whether the strategy delivers sustained growth will depend less on financing volume and more on policy continuity.
