Special Agro-Industrial Processing Zone programme stokes investors’ interest

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Tractor spraying soybean field at spring

BY BAMIDELE FAMOOFO

Uba Group

Local and international private sector businesses have expressed strong interest in the $538 million Special Agro-Industrial Processing Zone programme launched in Nigeria on Monday 24 October.

Conceived by the African Development Bank, the programme is expected to stimulate agriculture transformation in Nigeria.

The programme launch which took place in Abuja, last week, brought together a wide range of attendees, including Nigerian Vice President Yemi Osinbajo, several state governors, investors, representatives of logistics companies, and development partners.

Eight geographical areas in Nigeria will implement the programme’s first phase.

They are the seven states of Cross River, Imo, Kaduna, Kano, Kwara, Ogun, and Oyo, and the Abuja Federal Capital Territory.
Meanwhile, 19 more state governments have indicated an interest in also establishing special agro-industrial processing zones under the programme’s next phase.

The African Development Bank and partners are funding the first phase of the programme, which covers seven states and the Abuja federal capital territory.

The bank is providing $210 million, while the Islamic Development Bank and the International Fund for Agricultural Development (IFAD) are jointly contributing $310 million.

The Nigerian government is investing $18.05 million in the programme. Strong support comes from state governments, the private sector and other development partners.

The Director General of the Manufacturers’ Association of Nigeria, Segun Ajayi Kadir, praised the special agro-industrial zone concept. He said conditions must be right for the programme to succeed. “States should also insulate investors from land politics and take adequate care to ensure that the environment is right,” Kadir emphasised.

“The major attraction for us in the special agro-industrial processing zone is the opportunity to be competitive.”

The vice president of ARISE Integrated Industrial Platforms, Suren Abeywickrema, took participants through his company’s experience running processing zones in West Africa, explaining how Nigeria’s special agro-industrial processing zones could be modeled.

ARISE IIP is operating the $1 billion forestry-based Nkok special economic zone in Gabon. That zone has more than 100 international investors who have made an additional investment of more than $1.7 billion.

The General Manager of Corporate Finance at the Bank of Industry, Leonard Kanje, described the special agro-industrial processing zone as “business unusual.” He said his bank would provide financing for private sector players to locate in the zones.

Kanje said: “We will bring affordable and long-term financing. There is no way any country can survive on double-digit financing.

That is why we are involved and making access to finance easier. The Bank of Industry will also support capacity building for small and medium-scale enterprises located in the zones,” He told the meeting: “We also expect to see hundreds more SAPZs springing up because it is a tested and trusted model.”

The Director General of the African Development Bank in Nigeria, Lamin Barrow, said the implementation of the special agro-industrial processing zones would be done through a public-private partnership framework where the public sector provides an enabling environment while the private sector drives the programme.

The managing director of Psaltry International, Oluyemisi Iranloye, stressed the need for potential investors in the zones to engage progressively with farmers and the local community. “This program must engage the people around it,” she said. “If we follow the SAPZ plan, our currency should be stronger in a few years to come.”

“CBN"

Iranloye also called for mechanization opportunities to enable youths to do business in the zones.

The Chief Investment Officer at the Nigeria Sovereign Investment Authority, Kola Owodunni, said his agency was strongly supporting the programme. “We see it as catalytic for Nigeria. It aligns closely with our infrastructure fund. The SAPZ success means success for the Nigerian economy.”

Agriculture and Rural Development Minister Mohammad Abubakar said the zones would unlock more private-sector investment in the country’s agriculture sector.

Abubakar said: “The SAPZs will significantly drive the modernization of the agricultural sector, reduce food imports, drive value addition in staple food crops and create new economic zones of wealth and jobs creation in rural areas.”

Similarly, the Minister for Industry, Trade, and Investment, Niyi Adebayo, described the programme as a good illustration of how public and private sector-led organizations can collaborate to bring about impactful change in the agricultural sector.