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

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The Federal Government is pursuing a $500 million loan from the World Bank to enhance rural road infrastructure and agricultural marketing across Nigeria. This initiative aims to address the critical need for better connectivity in rural areas, where 92 million people currently lack access to quality roads.

This loan request is outlined in the final draft of the Resettlement Policy Framework for the Nigeria Rural Access and Agricultural Marketing Project Scale-Up (RAAMP-SU), implemented by the Federal Ministry of Agriculture and Rural Development. The project aims to improve rural access and climate resilience, boosting agricultural potential and marketing prospects for agrarian communities, ultimately enhancing livelihoods.

RAAMP-SU’s objectives include improving rural access and climate resilience, strengthening institutional capacity for rural road network management, and fortifying financial and institutional foundations for sustainable management of rural and state road networks.

The initiative is an extension of the earlier Rural Access and Agricultural Marketing Project, supported by the World Bank and the French Development Agency. It is led by the Federal Department of Rural Development within the Federal Ministry of Agriculture and Rural Development, with oversight by the Federal Project Management Unit.

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

Despite this extensive road network, the rural accessibility index for Nigeria, defined as the proportion of the rural population residing within 2 kilometers of an all-weather road, is only 25.5 percent. Consequently, around 92 million rural inhabitants lack connectivity. Rural access is particularly restricted in economically disadvantaged areas, underscoring the need to expand and enhance the rural road network and conserve rural transport assets.

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 required funding. This commitment is 79 percent higher than the initial World Bank commitment of $280 million for the parent project.

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

States wishing to participate in the project must have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provisions for administrative costs in the state budget. The policy document specifies: “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 requires 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.”

Additionally, RAAMP-SU aims to foster women’s representation in the transport sector. Funds will be allocated competitively between states, considering a refined socioeconomic selection matrix to increase rural access to basic services and promote food security, readiness in terms of design, and the state’s demonstrated commitment to efficient infrastructure 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.


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