Nigeria to benefit from $4.4bn agro-industrial investment – AfDB

Nigeria’s agricultural sector is set for a significant transformation as the country secures a $4.4 billion investment to expand the Special Agro-Industrial Processing Zones (SAPZ) across all 36 states and the Federal Capital Territory. This initiative, spearheaded by the African Development Bank (AfDB) in collaboration with international financial partners, aims to revolutionize agribusiness by creating structured agro-processing hubs that enhance productivity, reduce post-harvest losses, and generate employment.

The SAPZ programme, initially launched in 2022, is designed to stimulate value addition within Nigeria’s agricultural sector by providing strategically located industrial zones equipped with essential infrastructure such as power, water, roads, irrigation, and digital connectivity. These zones will act as economic hubs, attracting agro-processing industries that will source raw materials from local farmers, thereby strengthening rural economies and creating wealth at the grassroots level.

According to AfDB President Akinwumi Adesina, agricultural transformation is integral to broader economic development, emphasizing that the SAPZ model is already proving successful in several African countries. Nigeria’s participation in the initiative started with a $750 million funding goal, which later grew to $2.2 billion and ultimately reached $4.4 billion following investment mobilization efforts at the Africa Investment Forum.

Adesina highlighted that this initiative will empower Nigeria to process more of its agricultural produce domestically, reducing reliance on raw commodity exports and mitigating infrastructure challenges that have historically forced farmers to transport unprocessed goods over long distances for processing. By situating agro-industrial facilities close to farming communities, the SAPZ programme is expected to enhance food security, strengthen agribusiness value chains, and position Nigeria as a key player in Africa’s agro-industrial sector.
Source- Punch

Expert Review for Agri-Food Stakeholders
The expansion of SAPZs presents a pivotal opportunity for Nigeria’s agri-food stakeholders, from farmers to agribusiness investors and policymakers. Here are key insights:

1. Boosting Agricultural Productivity & Rural Development:
(a). The establishment of well-equipped processing zones will encourage farmers to scale up production, knowing they have guaranteed buyers within the zones.
(b). Rural communities will benefit from job creation, both directly within processing plants and indirectly through supply chain activities.

2. Enhancing Value Addition & Reducing Post-Harvest Losses:
(a). With modern processing infrastructure in place, raw agricultural produce can be converted into higher-value products, reducing waste and increasing farmers’ earnings.
(b). The reduction in post-harvest losses will improve food security and contribute to price stabilization.

3. Encouraging Private Sector Participation:
(a). Agro-processing firms and investors stand to benefit from a structured ecosystem where logistics, infrastructure, and market linkages are optimized.
(b). The SAPZs will attract agribusiness financing, driving further investments into processing and logistics.

4. Addressing Infrastructure Gaps:
(a). Historically, poor road networks, lack of electricity, and inefficient transportation have hindered agribusiness development. By addressing these gaps, SAPZs will lower operational costs and improve the competitiveness of locally processed goods.

5. Policy Implications & Sustainability:
(a). The success of SAPZs will depend on sustained policy support, including incentives for investors, streamlined land acquisition processes, and transparent governance.
(b).  State governments must collaborate effectively to ensure smooth implementation and alignment with national agricultural priorities.

Overall, the SAPZ initiative marks a transformative step in repositioning Nigeria’s agribusiness landscape. With the right execution, it has the potential to drive economic growth, empower smallholder farmers, and solidify Nigeria’s standing as a key agricultural hub in Africa.