Juliet Ezeh
Nigeria’s external borrowing profile is set to expand further as the World Bank approves a fresh $500 million credit facility aimed at revamping the country’s agricultural sector, raising fresh concerns over the nation’s growing dependence on multilateral lenders.
The loan, issued through the International Development Association, will fund the AGROW programme, a large-scale agricultural reform initiative targeting productivity, food security, and private sector investment.
While the intervention is positioned as a catalyst for growth, it also underscores Nigeria’s increasing reliance on concessional financing to drive critical sectors of the economy.
Data from the Debt Management Office shows that Nigeria’s total exposure to the World Bank Group stood at $19.54 billion as of September 2025, representing over 40 per cent of the country’s external debt stock. The new $500 million facility will further consolidate the lender’s position as Nigeria’s largest creditor.
Analysts say this trend raises important fiscal questions, particularly around debt sustainability and the long-term impact of repeated borrowing to fund development projects.
However, proponents argue that the structure of the loan, being concessional with low interest and long repayment terms, makes it a strategic tool for financing sectors that can drive economic expansion and reduce poverty.
Beyond the debt debate, the AGROW initiative signals a shift in how agricultural funding is deployed in Nigeria. Instead of direct government-led interventions, the programme adopts a private sector-led model designed to attract agribusiness investment and improve efficiency across value chains.
Through a matching grant system, private firms that engage smallholder farmers will receive funding support, creating a pipeline for increased production, processing, and market access.
The project also introduces a strong digital component, including the creation of a national farmer database and deployment of climate-smart advisory services steps seen as critical for modernising Nigeria’s largely informal farming system.
According to the World Bank’s Country Director, Mathew Verghis, the initiative is expected to reach up to one million farmers while unlocking an additional $220 million in private investment.
He emphasised that the programme is designed not just to boost output but to build resilience against climate shocks and improve food systems nationwide.
Still, the success of the initiative may ultimately hinge on execution an area where past interventions have struggled due to weak governance, poor monitoring, and limited accountability.
For Nigeria, the new facility represents both an opportunity and a test: an opportunity to fix structural weaknesses in agriculture, and a test of whether borrowed funds can translate into measurable economic impact.
If successful, the programme could reduce the country’s food import bill and strengthen rural economies. If not, it risks adding to a growing debt burden without delivering the promised transformation.
