FG Eyes $500 Million World Bank Loan For Rural Roads

The Federal Government of Nigeria has approached the World Bank to secure a $500 million loan aimed at enhancing rural road infrastructure and supporting agricultural marketing across the nation, targeting to uplift the livelihoods of millions in rural communities.

Contained in the final draft of the Resettlement Policy Framework, this request is part of the Nigeria Rural Access and Agricultural Marketing Project Scale-Up (RAAMP-SU), executed by the Federal Ministry of Agriculture and Rural Development.

The World Bank disclosed that the loan is designed to improve connectivity in rural areas, where an estimated 92 million people currently suffer due to inadequate road access.

The RAAMP-SU project is focused on enhancing rural access, increasing climate resilience, and boosting the agricultural economy by improving marketing channels for farming communities.

The project’s comprehensive objectives are to improve the accessibility and climate resilience of communities in served rural areas, enhance institutional capacity for managing rural road networks, and strengthen the financial and institutional foundations for the sustainable management of both rural and state road networks.

The RAAMP-SU initiative serves as an extension of the earlier Rural Access and Agricultural Marketing Project, which received support from both the World Bank and the French Development Agency.

The ongoing project is led by the Federal Department of Rural Development within the Federal Ministry of Agriculture and Rural Development, under the supervision of the Federal Project Management Unit.

This development comes as part of broader government efforts to address infrastructure deficits and promote economic growth in the less developed regions of the country, aligning with global standards and sustainable development goals.

The policy document noted: “Nigeria’s road network is relatively extensive, encompassing approximately 194,000 kilometres of roads. This includes 34,000 kilometres of federal roads, 30,000 kilometres of state roads, and 130,000 kilometres of registered rural roads. The road density equates to about 0.21 kilometres of roads per square kilometre.

“Despite this relatively high road density, the rural accessibility index for Nigeria (defined as the proportion of the rural population residing within 2 kilometres of an all-weather road) stands at a mere 25.5 per cent, resulting in approximately 92 million rural inhabitants lacking connectivity.

“Rural access is particularly restricted in areas densely populated by the economically disadvantaged. These factors underscore the imperative to expand and enhance the rural road network, as well as conserve rural road and transport assets.”

The total cost of the RAAMP-SU project is estimated at $600m, with the World Bank expected to provide 83.33 per cent of the required funding.

The commitment amount is 79 per cent higher than the initial World Bank commitment amount of $280m for the parent project.

The project will finance three key components, which are the Improvement of Resilient Rural Access ($387m), Climate Resilient Asset Management ($158m), and Institutional Strengthening and Project Management ($55m).

According to the policy document, states willing to participate in the project are required to have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provisions for administrative costs in the state budget.

The document added “While the eligibility for state participation under RAAMP required the drafting and placement of Road Fund and Roads Agency bills in the State house of assemblies, the new project would require the States to have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provision for administrative costs made in the state budget. In addition, RARAs offer an opportunity to foster women’s representation in the transport sector.

“The RAAMP-SU’s funds will be allocated on a competitive basis between states factoring in a refined socioeconomic selection matrix to increase rural access to basic services and promote food security; activities readiness in terms of design; and state’s demonstrated commitment in the projected infrastructure efficient maintenance, including potential co-financing from their resources.”

The policy framework stipulates that the implementation of resettlement and compensation plans is a prerequisite for project activities that cause resettlement.

Compensation and other assistance are expected to be provided before displacement, ensuring that necessary measures for resettlement and compensation are in place before any land acquisition or restriction of access