Business & Strategy

Nigerian Government Seeks $500 Million World Bank Loan to Boost Rural Road Infrastructure and Agricultural Marketing

Written by Jerry Alomatu on June 14, 2024

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The Federal Government of Nigeria has applied for a $500 million loan from the World Bank aimed at enhancing rural road infrastructure and agricultural marketing across the nation. This initiative is designed to improve connectivity for 92 million rural residents who currently lack access to reliable roads.

The loan request is detailed in the final draft of the Resettlement Policy Framework for the Nigeria Rural Access and Agricultural Marketing Project Scale-Up (RAAMP-SU), implemented by the Federal Ministry of Agriculture and Rural Development. The RAAMP-SU project aims to improve rural access and climate resilience, thereby boosting agricultural potential and marketing opportunities for agrarian communities.

Despite Nigeria’s extensive road network of approximately 194,000 kilometers, which includes federal, state, and registered rural roads, rural accessibility remains a significant challenge.

The rural accessibility index, defined as the proportion of the rural population living within 2 kilometers of an all-weather road, is only 25.5 percent. This means about 92 million rural inhabitants are without adequate road connectivity, severely impacting economically disadvantaged areas.

The total cost of the RAAMP-SU project is estimated at $600 million, with the World Bank expected to provide 83.33 percent of the required funding. This commitment is significantly higher than the initial $280 million commitment for the parent project.

The project will finance three key components: Improvement of Resilient Rural Access ($387 million), Climate Resilient Asset Management ($158 million), and Institutional Strengthening and Project Management ($55 million).

States willing to participate in the project are required to have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provisions for administrative costs in the state budget. The RAAMP-SU funds will be allocated competitively among states based on a refined socioeconomic selection matrix, aiming to increase rural access to basic services and promote food security.

The policy framework stipulates that resettlement and compensation plans must be implemented before the commencement of project activities that cause displacement. Compensation and other assistance are to be provided before displacement to ensure necessary measures are in place before any land acquisition or restriction of access.