IDA-backed facility targets smallholder productivity, value chains as external debt climbs…
The World Bank is set to approve a fresh $500 million loan for Nigeria next month, in a move aimed at boosting agricultural productivity and strengthening critical value chains across participating states.
Official project documents indicate that the proposed facility has an estimated approval date of March 30, 2026. The project lists a total operation cost of $500 million, with the full amount to be financed through a concessional credit from the bank’s lending arm, the International Development Association.
The borrower is identified as the Federal Republic of Nigeria, while implementation will be overseen by the Federal Ministry of Agriculture and Food Security in collaboration with participating state governments.
Focus on smallholders and value chains
According to the project outline, the programme is designed to raise smallholder farmer productivity and strengthen selected agricultural value chains in targeted states.
The World Bank noted that generating more and better jobs alongside addressing food and nutrition insecurity remains one of Nigeria’s most urgent development priorities.
The $500 million facility will be deployed across four key components:
- Integrating smallholder farmers into competitive value chains
- Modernising smallholder production systems
- Strengthening policy frameworks and improving the enabling environment to attract private investment in agricultural input markets
- Enhancing project coordination, monitoring and evaluation mechanisms
The financing is expected to channel long-term capital into agricultural transformation efforts, with a particular focus on improving yields, market access and value addition.
Rising debt profile
The planned loan comes at a time when Nigeria’s external debt exposure continues to rise. Data show that funding from the International Development Association increased by $1.9 billion within one year, reaching $18.7 billion as of December 31, 2025.
Figures from the Debt Management Office indicate that Nigeria’s total external debt stood at $46.98 billion as of June 30, 2025. Of that amount, the World Bank Group accounted for $19.39 billion.
The new facility will further deepen Nigeria’s engagement with multilateral lenders, even as policymakers argue that concessional financing remains critical to supporting structural reforms, food security and inclusive growth.
