Federal Government Seeks $500 Million World Bank Loan for Rural Roads

The Federal Government of Nigeria has requested a $500 million loan from the World Bank to improve rural road infrastructure and support agricultural marketing nationwide. This initiative aims to enhance the lives of millions in rural communities. The request is part of the Nigeria Rural Access and Agricultural Marketing Project Scale-Up (RAAMP-SU), managed by the Federal Ministry of Agriculture and Rural Development.

The World Bank announced that the loan aims to enhance connectivity in rural areas, where approximately 92 million people currently face challenges due to insufficient road access.

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

Its main objectives include improving accessibility and climate resilience in rural communities, strengthening institutional capacity for managing rural roads, and establishing sustainable financial and institutional frameworks for managing rural and state road networks.

RAAMP-SU builds upon the previous Rural Access and Agricultural Marketing Project, which received support from 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, overseen by the Federal Project Management Unit.

This initiative is part of broader government efforts to address infrastructure gaps and stimulate economic growth in less developed regions, aligning with global standards and sustainable development goals.

According to the policy document, Nigeria’s road network spans about 194,000 kilometers, including 34,000 kilometers of federal roads, 30,000 kilometers of state roads, and 130,000 kilometers of registered rural roads. The road density averages about 0.21 kilometers per square kilometer.

“Despite having a relatively high density of roads, the rural accessibility index for Nigeria—defined as the proportion of the rural population living within 2 kilometers of an all-weather road—is only 25.5 percent. This means approximately 92 million rural residents lack connectivity.

Access to rural areas is particularly limited in economically disadvantaged regions. These factors highlight the urgent need to expand and improve the rural road network and to preserve rural road and transport infrastructure.”

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

This commitment amount represents a 79 percent increase over the initial World Bank commitment of $280 million for the main project.”

“The project will fund three main components: Improving Resilient Rural Access ($387 million), Climate Resilient Asset Management ($158 million), and Institutional Strengthening and Project Management ($55 million).

According to the policy document, states interested in participating must have a fully operational Roads Fund and Roads Agency, complete with appointed boards and staff, and provisions for administrative costs in their state budgets.”

“The document also states, ‘To be eligible for participation under RAAMP, states must draft and pass Road Fund and Roads Agency bills in their State houses of assemblies. The new project requires states to have fully functional Roads Fund and Roads Agency structures, with appointed boards and staff, and provisions for administrative costs in the state budget. Additionally, Rural Access Roads Agencies (RARAs) offer an opportunity to promote women’s representation in the transport sector.’

“The RAAMP-SU funds will be distributed competitively among states based on a refined socioeconomic selection matrix. This aims to increase rural access to essential services, enhance food security, assess readiness in terms of project design, and evaluate the state’s commitment to efficient infrastructure maintenance, potentially with co-financing from their own resources.”

“The policy framework mandates that resettlement and compensation plans must be implemented prior to project activities that involve resettlement. Compensation and other assistance will be provided before displacement occurs, ensuring that necessary measures for resettlement and compensation are in place before any land acquisition or access restriction.”