World Bank loan Nigeria
Loans - News - December 17, 2021

Why the World Bank Approved $700m Loan for Projects in Northern Nigeria

The World Bank Country Director for Nigeria, Shubham Chaudhuri, says, “Nigeria is faced with water scarcity and droughts which occur every five years, on average, with the potential to increase in frequency due to climate change.

The World Bank has approved a $700 million loan for Nigeria Agro-Climatic resilience in the Semi-Arid Landscapes (ACReSAL) project from its International Development Association. 

A statement by the World Bank says the loan facility will increase sustainable landscape management practices in northern Nigeria and strengthen the country’s long-term enabling environment for integrated Agro-Climatic resilient landscape management.

The global financial institution says Nigeria’s primary crop production has been progressively dropping over the past 20 years, partly due to climate change, forcing an expansion of agricultural land and increased importation to cater to the country’s growing population needs for food.

The bank also noted that land degradation, desertification, and habitat loss continue to be exacerbated by persistent water shortages, particularly in northern Nigeria.

“Resource shortages, violent conflict, outdated agricultural systems not adapted to changing dryland conditions, lack of access to finance, weak value chain linkages, an uncompetitive environment for agribusiness, and poor market access are other key barriers to increased agricultural productivity in Nigeria,” the statement reads.

In light of this, the credit facility would address these climatic challenges and sustain Nigeria’s economic growth.

The World Bank Country Director for Nigeria, Shubham Chaudhuri, says, “Nigeria is faced with water scarcity and droughts which occur every five years, on average, with the potential to increase in frequency due to climate change. This scenario not only threatens food security, livelihoods, and productivity but also exacerbates fragility and increases the risk of violence.”

“With communities and households that are most dependent on natural resources for their survival and vulnerable to desertification, this intervention will improve multi-sectoral watershed planning and investments to help about 3.4 million direct beneficiaries adapt to evolving dryland conditions”, Chaudhuri adds.

The project, according to the statement, is to span for six years and will be centred on: Dryland Management, Community Climate Resilience, Institutional Strengthening and Project Management, and Contingent Emergency Response.

This is to boost the country’s ability to adapt to a changing climate, primarily through enabling multi-sectoral convergence (across the environment, agriculture, and water) and technology modernisation, including better data, analytics, and connectivity.

On the beneficiaries, Joy Iganya Agene, Task Team Leader, ACReSAL, World Bank, says, “the project will specifically target the inclusion of vulnerable and marginalised groups, including women, youth, the elderly, persons with disabilities, internally displaced people, and ethnic and religious minorities using an integrated watershed approach across sectors and levels of governance.”

“This will help reduce the vulnerability of millions of the extreme poor in northern Nigeria, strengthening their role in the management of their natural resources while also addressing land degradation, strengthening climate resilience, and lessening livelihood vulnerability in dry, semi-arid and dry sub-humid regions in the northern states,” she noted.

World Bank: International Development Association

The International Development Association (IDA) is a branch of the World Bank, established in 1960. It assists the world’s poorest countries by giving grants and low or no-interest loans for projects and programs that promote economic growth, decrease poverty, and enhance the lives of impoverished people. 

IDA is one of the most important sources of aid for the world’s 76 poorest countries, 39 in Africa. The 1.6 billion people who live in IDA nations benefit from the resources provided by IDA. IDA has supported development initiatives in 113 countries since 1960. Over the last three years, annual commitments have averaged over $21 billion, with around 61% going to Africa.

IDA pledges totalled $36 billion in the fiscal year ending June 30, 2021, with $12.1 billion in disbursements. The African continent received 70% of the overall promises. IDA has given $458 billion to 114 countries since 1960. Annual pledges have consistently climbed over the last three years, averaging around $29.4 billion (FY19-FY21).

China, Chile, India, South Korea, and Turkey are among the 37 nations that have graduated, with many of them becoming IDA donors.

READ ALSO: These African Countries Can Earn Billions from Climate Tech – World Bank

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