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Friday, February 3, 2023

AfDB commits $210m for development of Nigeria’s agro-processing zones

The African Development Bank (AfDB) says it is providing $210 million for the development of the Special Agro-Industrial Processing Zones (SAPZ) programme in Nigeria.

SAPZ Programme
Vice President Yemi Osinbajo with other dignitaries at the launch of the SAPZ programme

AfDB’s President, Akinwumi Adesina, disclosed this in his virtual address at the inauguration of SAPZ programme on Monday, October 24, 2022, in Abuja.

SAPZ programme, inaugurated by Vice President Yemi Osinbajo, is a government-enabled and private sector-led initiative to moblise private sector investment to develop value chains for selected strategic crops and livestock in participating states.

Adesina said that, to fully unlock the potential of Nigeria’s agriculture, more needs to be done to promote and support the agribusiness sector.

“Transforming agriculture must start with recognising that agriculture is a business, a wealth-creating sector, not just a way of life.

“Unlocking wealth in agriculture requires the provision of appropriate technologies to boost productivity, development of agricultural value chains, financial structure to support agricultural value chains, and investments in infrastructure to unlock investments by food and agribusinesses.

“That is why the AfDB has launched the development of SAPZ; the SAPZs are new economic zones, located in rural areas, to be fully supported by infrastructure (power, water, roads, digital infrastructure, and logistics) that will allow food and agribusiness companies to locate within such zones.

“This will put them close to farmers in production catchment areas, provide market offtakes for farmers, support processing and value addition, reduce food losses, and allow the emergence of highly competitive food and agricultural value chains.’’

He said that the development of the SAPZs was one that he had envisioned when he was the Minister of Agriculture in Nigeria.

Adesina said he knew that Nigeria needed to diversify its economy by turning agriculture into a wealth-creating sector with highly competitive agricultural value chains.

“Seven years after my being Minister of Agriculture of Nigeria, the dream to establish these SAPZs continued.

“I continued to push for the establishment of the SAPZs when I was elected President of the AfDB in 2015.

“Today, the African Development Bank is investing over $1 billion in SAPZs in 18 African countries; the SAPZs will help to transform the food and agriculture sector.

“They will attract private agribusinesses to locate in infrastructure-enabled rural areas; they will create massive amounts of jobs across agricultural value chains.’’

The AfDB boss said that SAPZ would reduce rural to urban migration, expand the fiscal space, and enhance the emergence of competitive agricultural value chains.

He said that the SAPZ would help to transform rural economies of Nigeria from zones of economic misery to zones of economic prosperity, boosting wealth and livelihoods.

Adesina added that he is delighted that the SAPZ has finally become a reality in Nigeria.

“The AfDB is providing $210 million for the development of the SAPZs in Nigeria.

“We are delighted with our partnership with the Islamic Development Bank (IsDB) which is co-financing with $150 million, and with the International Fund for Agricultural Development (IFAD) which is co-financing with $160 million.’’

Adesina said the SAPZ programme in Nigeria is the largest in Africa.

He commended the commitment of the Ministers of Agriculture, Finance, Budget and National Planning as well as the commitment of the state governors to the programme.

Adesina said that the inauguration of SAPZs marked the beginning of a long journey of transformation.

“The SAPZ will help feed Nigeria; the SAPZs will help transform Nigeria’s rural economies, help to expand fiscal space; and fully unlock Nigeria’s agricultural potential.

“The SAPZs will create millions of jobs; let us travel this journey together; Nigerians deserve the results; lower food prices, food security, and wealth for rural areas,’’ he said.

Earlier in her speech, Zainab Ahmed, the Minister of Finance, Budget and National Planning, said it is the desire of President Muhammadu Buhari to resuscitate the vigour of having agro-processing zones in Nigeria.

She said SAPZ is aimed at promoting the agriculture value-chain, to empower youths and revitalise non-functional investments in agriculture and to curtail the level of importation of products that could be locally produced in the country.

Ahmed said that the first phase of the SAPZ programme will kick-start with a credit facility of $410 million already from secured from co-financing development partners – AfDB, IsDB and IFAD.

Vice President Yemi Osinbajo says the SAPZ programme will address food insecurity and create millions of good-paying, agro-industrial jobs.

The vice president made this submission in his keynote address at the inauguration of SAPZ programme.

Osinbajo said that the programme, which was recently approved by the Federal Executive Council, is a major cross-cutting value chain investment effort.

He said it was driven by the Federal Ministry of Agriculture and Rural Development, in alignment with the National Agricultural Technology and Innovation Policy of the Federal Government to incentivise agro-industrialisation for private sector development.

“So, specifically, the SAPZ programme is designed to develop multiple clusters of Agricultural Transformation Centres (ATCs) and Agro-Industrial Hubs (AIHs) within major clusters of high agricultural production.

“The clusters where functional infrastructure like roads, power, water, and communication are provided to attract private investment into modern agro-processing and value addition to locally produced crops, livestock and related agribusiness activities.

“So, where a zone has an advantage in rice production for example, the well-resourced SAPZ would be located there to bring together agricultural producers, processors, aggregators, and distributors to operate in the production, processing and industrialisation of rice.

“The SAPZ programme is a five-year Programme, being implemented by the Federal Government of Nigeria (FGN) in partnership with the African Development Bank (AfDB), the International Fund for Agricultural Development (IFAD), Islamic Development Bank (IsDB), state governments and private investors, in seven participating states.

“The states are Kano, Imo, Kaduna, Cross River, Kwara, Oyo, Ogun and the Federal Capital Territory (FCT).”

He said that the programme is expected, in the first phase, to achieve the following: Import Substitution, which will reduce Nigeria’s current food import bill; boost revenue from agricultural exports, create wealth for rural farming communities; and create new sustainable jobs, especially for women and youths.

The vice president said that the programme is also expected to stem rural-urban migration, boost rural livelihoods and revive stranded public and private-sector funded assets and decisively improve food security

He said the programme is targeted at vastly improving the business environment for agro-industrial processors as it would improve their productivity and enable value addition for inclusive and adaptive economic growth.

“The programme is now a critical component of our agricultural strategy, which is to accelerate the industrialization of our agricultural sector with the objective of being ahead of our constraints in providing food, nutrition and wealth for the largest population in our continent.

“The first phase is in eight locations, in the next phase we will bring on board another 18 states; the SAPZs also stand to benefit from two salutary developments.

“First is technology and innovation; there has been an incredible upsurge in the number of agric tech startups in Nigeria all along the entire agriculture value chain.

“Some of those innovations have vastly improved the quality of inputs, some use innovation to improve yields, some exponentially increase investments in agri-businesses by various crowd-funding techniques.

“The National Information Technology Development Agency (NITDA) is also set to deploy innovative technology and digital skill sets to support the implementation of the SAPZs.’’

Osinbajo said that the African Continental Free Trade Agreement (AfCFTA) opened up for Nigeria, an opportunity to be the breadbasket and the agri- business hub of the region.

He said that convergence of resource and opportunity “is certainly auspicious for the great impact that we look forward to from the SAPZs.

“The operation of the SAPZs will also leverage on other Federal and State programmes, including the National Livestock Transformation Plan (NLTP: 2019 – 2028), and the Nigeria Industrial Revolution Plan (NIRP).

“The agricultural sector is pivotal in pulling our economy out of recession, and is the single largest employer of labour, so we must incentivise agriculture through greater investments and an enabling environment for private sector participation, and to advance our national agro-industrialisation drive.’’

Osinbajo said that the Federal Government is proud of the strategic relationships with AfDB, IFAD and IsDB over the years in building long-term national prosperity for our country through agriculture. And we thank them for their steadfast support through the years.

According to him, the inauguration of SAPZ signals a profoundly important moment in Nigeria’s agricultural odyssey.

“If the SAPZ programme delivers on its objectives and we have no doubt that it will, then we would in less than a decade deal a fatal blow to food insecurity, create millions of good-paying agro-industrial jobs and opportunities and radically improve export earnings from agriculture,’’ he said.

Osinbajo, afterwards, performed the unveiling of SAPZ Commemorative Stamp.

Other notable speakers at the event were Mohammad Abubakar, Minister of Agriculture and Rural Development; Zainab Ahmed, Minister of Finance, Budget and National Planning; Vice President, IFAD, Katherine Meighan; and Akinwumi Adesina, President, AfDB, who delivered a virtual address.

Niyi Adebayo, Minister of Industry, Trade and Investment; Muhammad Al Jasser, President of IsDB; and Gov. Ben Ayade of Cross River State also made remarks at the event.

By Chijioke Okoronkwo

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