The World Bank is poised to approve a $500 million loan facility for the Federal Republic of Nigeria on March 30, 2026, aimed at boosting agricultural productivity, strengthening value chains and creating jobs across participating states. The move follows internal review and negotiation phases and is part of the Bank’s broader push to support economic development in one of Africa’s largest economies.
According to official project documentation, the planned funding is housed under the Nigeria Sustainable Agricultural Value-Chains for Growth initiative often referred to as the AGROW project. The full $500 million will be financed through the International Development Association (IDA), the World Bank’s concessional lending arm that offers low interest, long tenor financing to eligible developing countries.
Under the arrangement, the Federal Ministry of Agriculture and Food Security along with designated state agencies will serve as the implementing partners. The primary development objective is to increase smallholder productivity and strengthen targeted agricultural value chains, with a focus on enhancing market participation and facilitating higher income for farming households.
Strategic goals of the AGROW project
The AGROW initiative reflects a strategic shift toward strengthening linkages between smallholder farmers and structured markets, while also modernizing agricultural practices. The project is designed to tackle several entrenched structural issues in Nigeria’s agricultural sector:
- Value Chain Integration: Connecting smallholders with buyers and agribusinesses to reduce transaction costs and create more competitive supply chains.
- Modernization of Production: Supporting the adoption of improved seeds, research and extension systems, and climate resilient farming practices including digital agriculture platforms to enhance productivity.
- Policy and Investment Enabling Environment: Strengthening policies that improve private investment conditions in key input markets, particularly for seeds and fertilisers, which are critical to productivity growth.
- Coordination and Monitoring: Establishing robust frameworks for project oversight and outcome tracking to ensure efficient implementation and measurable impact.
The private sector led, public sector facilitated approach embedded in AGROW is intended to harness private capital and expertise, while government institutions provide the enabling environment and policy support.
Economic context and rationale
Agriculture remains a cornerstone of Nigeria’s economy. Despite employing roughly one third of the workforce and supporting an estimated 21 million people in primary agriculture, the sector continues to face challenges including low productivity, limited market access, and reliance on food imports valued at approximately $10 billion annually.
The World Bank has identified youth unemployment, food and nutrition insecurity, and structural weaknesses in value chains as persistent development constraints. Strengthening agricultural productivity and market integration is viewed as a catalyst for job creation and sustainable economic growth especially in rural regions where poverty rates tend to be highest.
The AGROW project aligns with the Nigerian government’s Renewed Hope Agenda, which prioritises economic diversification, support for small and medium scale enterprises SMEs, and investment in rural development. By promoting a more competitive agricultural sector, the initiative aims to elevate incomes, stimulate rural investment and reduce dependency on costly food imports.
Debt profile and broader financial landscape
Nigeria’s engagement with the IDA is significant and long standing. Recent figures show that as of 31 December 2025, Nigeria’s outstanding loans from the IDA totaled about $18.7 billion, making it the third largest borrower in the IDA portfolio globally behind Bangladesh and Pakistan. This represents a year on year increase of over 11 per cent and highlights the country’s reliance on concessional financing for development priorities.
While IDA loans are considered highly concessional typically featuring low interest rates and extended repayment periods the growing portfolio raises concerns about overall debt sustainability, particularly amid tight fiscal conditions and limited revenue growth. Nigeria’s total external debt stood at around $46.98 billion as of mid 2025, with the World Bank Group accounting for a significant share of this exposure.
Economists stress the importance of ensuring that externally financed projects are closely aligned with revenue generating and productivity enhancing outcomes, to mitigate risks of debt distress. At the same time, concessional loans like the AGROW facility are recognised as critical tools for funding long term structural reforms that domestic revenue alone cannot support.
Implementation and expected impact
Once approved by the World Bank Board late in March 2026, the AGROW project will proceed with formal negotiation and disbursement stages. Implementation is expected to roll out in phases, with results monitoring frameworks tracking progress across key indicators such as yield improvements, market access, and income outcomes among smallholders.
By targeting structural barriers in production and market engagement, the project is projected to deliver broad based economic benefits including increased agricultural productivity, enhanced rural employment, and stronger integration of smallholders into value chains capable of supporting higher value agribusiness activities.
The planned $500 million World Bank loan to Nigeria represents a significant investment in agricultural development and job creation. By focusing on value chain integration and production modernization, the project seeks to address core constraints in rural economies and expand opportunities for smallholder farmers. While Nigeria’s debt profile continues to attract scrutiny, strategic leveraging of concessional financing through IDA remains a central component of the country’s development finance strategy. The success of this initiative will depend on effective implementation, private sector engagement, and transparent mechanisms for ensuring that funds translate into measurable socio economic outcomes.