AfDB Approves $200m Loan to Transform Nigeria’s Agriculture Sector

Nigeria’s agriculture sector is set for a major financial boost after the board of the African Development Bank Group approved a $200 million loan to expand priority farming investments across the country.

The financing will support the second phase of the federal government’s National Agricultural Growth Scheme–Agro-Pocket programme, a flagship initiative designed to improve food production and modernise farming systems.

According to the bank, the new funding builds on earlier interventions and is aimed at increasing crop yields, strengthening value chains and promoting climate-smart agriculture. In simple terms, it is about helping farmers grow more food, reduce losses and adapt better to changing weather conditions.

Focus on inputs, technology and climate resilience

The loan will fund five core programmes under Nigeria’s agricultural reform framework. These programmes are expected to improve access to high-quality seeds and fertilisers, revitalise extension services and promote digital tools for farmers.

Officials say particular attention will be given to climate-resilient farming. This includes distributing improved seed varieties capable of withstanding drought and extreme weather, as well as fertiliser blends tailored to local soil conditions.

Crop insurance coverage is also set to expand under the scheme. The goal is to shield farmers from climate-related losses, a growing concern as unpredictable rainfall and flooding continue to affect food production in many parts of the country.

The bank estimates that the programme could increase wheat production fivefold while raising rice output by 20 per cent. If achieved, these targets would significantly reduce Nigeria’s reliance on food imports and improve national food security.

Building on gains from phase one

The second phase follows what officials describe as strong results from the programme’s first round. During phase one, an ICT-driven system was introduced to distribute farm inputs through more than 600 agro-dealers nationwide.

That intervention supported the cultivation of over 100,000 hectares of wheat during the 2023/2024 dry season. National wheat output reportedly tripled to about 0.5 million metric tonnes in 2024, benefiting hundreds of thousands of smallholder farmers.

Abdul Kamara, Director General of the bank’s Nigeria Country Department, said the new phase would scale up those gains.

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He explained that expanding access to digital tools, improved inputs and climate-smart technologies would help farmers boost productivity while strengthening resilience against shocks.

Why agriculture matters for Nigeria

Agriculture remains the backbone of Nigeria’s economy. The sector employs roughly 38 per cent of the workforce and contributes over a quarter of the country’s Gross Domestic Product. Yet productivity remains low due to limited irrigation, poor access to quality inputs and climate pressures.

The four-year project, scheduled to begin in March, is also expected to prioritise young people and women by improving access to technology and financial support in commercial farming.

For policymakers, the message is clear: improving agriculture is not just about food. It is about jobs, economic stability and reducing pressure on foreign exchange spent on imports.

With this new $200 million backing, expectations are high that Nigeria’s farms could move closer to feeding the nation more efficiently and competitively than before.