World Bank $500m Nigeria agriculture loan set for March approval to boost productivity, value chains and rural jobs

The World Bank is set to approve a fresh $500m credit facility to the Federal Republic of Nigeria on March 30, 2026, aimed at boosting agricultural productivity, strengthening value chains and creating jobs across participating states.

Also read: Nigeria’s World Bank debt surges to $18.7bn

Details of the planned World Bank $500m Nigeria agriculture loan are contained in the Project Information Document for the Nigeria Sustainable Agricultural Value-Chains for Growth initiative, also known as AGROW.

According to the document, the project carries a total operation cost of $500m, with the entire financing to be provided by the International Development Association as an IDA credit.

The borrower is listed as the Federal Republic of Nigeria, while implementation will be handled by the Federal Ministry of Agriculture and Food Security in collaboration with participating states.

The proposed development objective is to increase smallholder productivity and strengthen targeted agricultural value chains in participating states.

The review process has progressed beyond appraisal to the decision stage, with the Bank noting that its review authorised the team to appraise and negotiate, signalling clearance of a critical internal hurdle.

The World Bank highlighted Nigeria’s structural challenges, stating that creating more and better jobs while addressing food and nutrition insecurity remains a pressing development priority.

Agriculture remains the country’s largest employer, with roughly one-third of the working population relying on the sector for their livelihood and about 21 million people engaged in primary agriculture.

Despite vast potential, the sector faces significant constraints. The Bank observed that Nigeria imports approximately $10bn worth of food annually, underscoring gaps in domestic production and value addition.

The World Bank $500m Nigeria agriculture loan will adopt what the institution describes as a private sector-led, public sector-facilitated approach.

The strategy aims to integrate smallholder farmers into structured output markets, promote value addition and mobilise private capital. The operation is classified as both “MFD-Enabling” and “Private Capital Enabling.”

Structurally, the facility will be deployed across four components: integrating smallholders into competitive value chains, modernising production systems, strengthening policy and the enabling environment for private investment in input markets, and project coordination and monitoring.

Under the value chain integration component, the project will support aggregation models linking farmers with off-takers and agribusinesses to reduce transaction costs and improve supply reliability.

On the production side, investments will target research, extension services, improved seeds and digital agriculture platforms to enhance yields and climate resilience.

The policy component will address systemic bottlenecks in seed and fertiliser markets and promote responsible land-based investments through the Framework for Responsible and Inclusive Land-Intensive Agriculture.

If approved as scheduled, the facility will add to Nigeria’s expanding exposure to IDA financing. Nigeria’s debt to the International Development Association rose by $1.9bn year-on-year to $18.7bn as of December 31, 2025, up from $16.8bn at the end of 2024, representing an 11.3 per cent increase.

The latest figures place Nigeria as the third-largest borrower in the IDA portfolio, behind Bangladesh and Pakistan.

As of June 30, 2025, Nigeria’s total external debt stood at $46.98bn, according to the Debt Management Office, with the World Bank Group accounting for $19.39bn, or 41.3 per cent of the total.

Also read: World Bank’s Anna Bjerde visits Nigeria to boost growth

The proposed credit underscores the World Bank’s outsized role in funding Nigeria’s development programmes at a time of tightening fiscal space and global market volatility, even as questions persist over the country’s growing reliance on concessional borrowing.