FG To Take $500M World Bank Loan to Boost Roads and Agriculture

The Federal Government of Nigeria is seeking a $500 million loan from the World Bank to enhance rural road infrastructure and agricultural marketing across the nation. This initiative, known as the Nigeria Rural Access and Agricultural Marketing Project Scale-UP (RAAMP-SU), aims to improve rural connectivity for 92 million Nigerians who currently lack access to adequate roads.

Outlined in the Resettlement Policy Framework, the RAAMP-SU project is spearheaded by the Federal Ministry of Agriculture and Rural Development. The project seeks to enhance rural access, strengthen climate resilience, and improve agricultural marketing, thus boosting livelihoods in agrarian communities.

Key objectives include upgrading rural access, fortifying institutional capacity for road management, and establishing sustainable financial foundations for rural and state road networks. RAAMP-SU builds upon the earlier Rural Access and Agricultural Marketing Project, supported by the World Bank and the French Development Agency, under the Federal Department of Rural Development’s leadership.

Despite Nigeria’s extensive road network, with about 194,000 kilometers of roads, only 25.5% of the rural population lives within 2 kilometers of an all-weather road. This lack of connectivity highlights the urgent need to enhance rural road infrastructure, especially in economically disadvantaged areas.

The total cost of the RAAMP-SU project is estimated at $600 million, with the World Bank expected to cover 83.33% of the funding. This new commitment is significantly higher than the initial $280 million provided for the parent project. Funding will be allocated across three main components: Improvement of Resilient Rural Access ($387 million), Climate Resilient Asset Management ($158 million), and Institutional Strengthening and Project Management ($55 million).

Participating states must have a fully operational Roads Fund and Roads Agency, complete with boards, staff, and budget provisions. Additionally, the project aims to foster women’s representation in the transport sector.

The allocation of funds will be competitive, based on a socioeconomic selection matrix that prioritizes increasing rural access to services, promoting food security, and demonstrating commitment to infrastructure maintenance and potential co-financing.

Resettlement and compensation plans are prerequisites for any project activities requiring land acquisition or access restrictions, ensuring support and compensation are provided before displacement.