New IDA-backed AGROW project targets smallholder productivity, value chain integration, and rural job creation amid rising debt exposure….
The World Bank is preparing to approve a fresh $500m loan for Nigeria aimed at boosting agricultural productivity, strengthening value chains and creating jobs across participating states.
Details of the proposed financing are contained in the bank’s Project Information Document for the Nigeria Sustainable Agricultural Value-Chains for Growth initiative, also known as AGROW. The document indicates a tentative approval date of March 30, 2026, with a total operation cost and total financing of $500m.
According to the document, the entire amount will be financed through the International Development Association (IDA) as a credit facility. 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 project’s development objective is to increase smallholder productivity and strengthen targeted agricultural value chains in selected states. The bank noted that the review process has advanced beyond the appraisal phase to the decision stage, stating that “the review did authorise the team to appraise and negotiate,” signalling that the programme has cleared a key internal milestone ahead of final approval.
In outlining the rationale for the intervention, the World Bank pointed to Nigeria’s pressing structural challenges, including job creation and food security. Agriculture remains the country’s largest employer, with roughly one-third of the working population dependent on the sector for their livelihoods. Primary agriculture alone employs about 21 million people.
Despite this, the country continues to grapple with low productivity and heavy food imports, estimated at about $10bn annually. The proposed AGROW project is designed to adopt a private sector-led, public sector-facilitated model to improve smallholder output, integrate farmers into structured markets and encourage value addition.
The initiative is aligned with the Federal Government’s Renewed Hope Agenda and is also classified as both “MFD-Enabling” and “Private Capital Enabling,” indicating an intention to crowd in private investment alongside public financing.
Structurally, the $500m credit will be deployed across four major components: integrating smallholder farmers into competitive value chains; modernising smallholder production systems; strengthening policy and the enabling environment for private investment in input markets; and supporting project coordination and monitoring.
Under the value chain integration component, the project will back aggregation models linking farmers with off-takers and agribusiness firms to reduce transaction costs and improve supply reliability. On the production front, it will invest in agricultural research, extension services, improved seed systems and digital agriculture platforms aimed at boosting yields and enhancing climate resilience.
The policy reform element will target systemic bottlenecks in seed and fertiliser markets, while also promoting responsible land-based investments under the Framework for Responsible and Inclusive Land-Intensive Agriculture.
If approved at the end of March as scheduled, the new facility will further expand Nigeria’s exposure to the World Bank’s concessional lending arm. Recent financial statements show that Nigeria’s outstanding debt to the IDA rose by $1.9bn within one year to reach $18.7bn as of December 31, 2025, up from $16.8bn at the end of 2024, an 11.3 per cent year-on-year increase.
The latest figures position Nigeria as the third-largest borrower within the IDA portfolio, behind Bangladesh and Pakistan among the top ten countries with the highest exposure levels.
Data from the Debt Management Office show that as of June 30, 2025, Nigeria’s total external debt stood at $46.98bn. Of that amount, the World Bank Group accounted for $19.39bn comprising $18.04bn from the IDA and $1.35bn from the International Bank for Reconstruction and Development representing 41.3 per cent of the country’s external debt stock.
The new agriculture facility, if finalised, would deepen the World Bank’s footprint in Nigeria’s development financing landscape, even as policymakers navigate tightening fiscal space and heightened global market volatility.
