New dawn for Nigeria’s agriculture with special agro-industrial processing zones

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BY FREDRICK NWABUFO

Nigeria is a country that has been dependent of oil for much of its 62 years as an independent nation. However, it is by and large an agricultural nation. In fact, there are many who would say that oil has taken much focus away from agriculture.

There have been many landmark policies and programs in agriculture over the years. In 1963,  the blueprint was all about surplus extraction and an export orientation.

The year 1972 brought the National Accelerated Food Production Program a pillar of the then Gowon administration. There followed Operation Feed the Nation in 1976 by the Obasanjo administration, and Green Revolution in 1980 by the Shagari administration.

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In more recent years, the Jonathan administration introduced the Growth Enhancement Scheme, which revolutionized Nigeria’s agriculture value chains under the then Minister of Agriculture Akinwumi Adesina. Since then, we have seen follow-up on rice production as a centerpiece of economic growth under the current Buhari administration.

Agriculture provides employment for 35% of Nigeria’s population.  It is a principal contributor to the local economy. Nigeria has about 70.8 million hectares of agricultural land. But the country is yet to actualize its full potential in agriculture. It therefore makes sense that the federal and state governments are marshalling financial and technological resources for the sector.

A new program introduced by the African Development Bank is about to revolutionize agriculture in Nigeria and African countries. The Special Agro-Industrial Processing Zones project is a flagship scheme of the African Development Bank Group’s Feed Africa strategy.

African Development Bank President Dr Akinwumi Adesina said: “The Special Agro-Industrial Processing Zones will be a gamechanger in African agriculture. The food processing companies in Nigeria and most other African countries are not located in the rural areas. This is because there is no infrastructure in rural areas. What we are doing with these special agro-industrial processing zones is reducing the cost of doing business for the food and agriculture companies, so that they can off-take from the farmers and process there. I am delighted to see so many Nigerian states taking advantage of this program to revitalize agriculture as the viable business that it is.”

Senior officials from three international development institutions—the African Development Bank, the Islamic Development Bank (IsDB), the International Fund for Agricultural Development (IFAD)—and other partners will join Nigerian officials on the 24th and 25th of October 2022 to launch the Special Agro-Industrial Processing Zones (SAPZ) program in Nigeria.

President Muhammadu Buhari, Adesina, representatives from IFAD, IsDB, as well as investors and key private sector players, will launch phase one of the multibillion-dollar program in Abuja.

The Special Agro-Industrial Processing Zones are designed to cluster agro-processing activities within areas of high agricultural advantage. The zones bring together agricultural producers, processors, aggregators, and distributors to operate within a sphere of comparative advantage They will reducee transaction costs and drivee productivity and enterprise.

The first phase of the program will be implemented in seven Nigerian states, namely, Cross River, Imo, Kaduna, Kano, Kwara, Ogun, Oyo, and the Federal Capital Territory.

For Cross River state, the value chain commodities are cocoa, rice, and cassava. In Imo state it is livestock, notably diary products and cattle as well as poultry, maize, soybeans and cassava. In Kaduna state, the commodities are Tomato, maize, soybeans and ginger Kano state will focus on tomatoes, rice and groundnuts. Kwara state will look to livestock, while Ogun state will prioritize cassava, rice, poultry and fisheries s The value chain commodities in Oyo state will be cassava, soybeans, and rice, and the Federal Capital Territory will dwell on beef and dairy products as their livestock products.

The Special Agro-Industrial Processing Zones program has four broad components. They are designed to support the development of an enabling environment including adapted infrastructure for agro-industrial hubs. Secondly, they will  improve agricultural productivity and enterprise development to enhance agricultural value chains and job creation in catchment areas. Third, the program supports agro-industrial zone policy and institutional development. The fourth component of the  program is coordination and management.

Key expected outputs of the first phase of the program are the development of infrastructure for eight agro-industrial processing hubs and fifteen agricultural transformation centers. Phase one will also result in connecting2,300 hectares of irrigated land and farms to market access roads. There will be a supply of certified agricultural inputs and extension services. Other phase 1 outputs will be skills development for farmers and micro, small and medium scale enterprises, and an updated agro-industrial zone policy with a special regulatory regime.

Phase 1 will be implemented over 24 months. The total program will cost $538.05 million net of taxes.

The African Development Bank will provide a loan of $160 million (29.7%of total cost, together with an Africa Growing Together Fund loan of $50 million (9.3%). The Islamic Development Bank and the International Fund for Agricultural Development will provide parallel co-financing of $150 million (27.9%) and $100 million (18.6%), respectively.

Additional resources of $ 60 million,1(1.1%) will be mobilized through the Green Climate Fund by IFAD from the Inclusive Green Financing initiative. The federal and state governments will contribute $18.05 million (3.4%) both cash and in kind.

The contribution by the African Development Bank and partners is catalytic, as more private sector partners bring in equity contribution. This is consistent with the SAPZ operating principle of government enabled-private sector driven agro-industrialization.

In January 2022, several state governors visited the African Development Bank in Abidjan. They were Governor Nasir el-Rufai of Kaduna state; Governor Dapo Abiodun of Ogun state; Governor Seyi Makinde  of Oyo state; Governor Hope Uzodimma  of Imo state, and Uche Orji, former chief executive officer of the Nigeria Sovereign Investment Authority They discussed their SAPZ programs with Dr Adesina and resolved to advance them.

El-Rufaisaid: “We are committed to the SAPZ program, all of us as governors, and I speak also on behalf of the president of Nigeria.” Abiodun said: “This promises to be a very successful and transformational initiative, for Ogun State and for the country. This initiative is an important step toward reducing unemployment, a challenge that we face in Ogun State, with the growing number of educated young people that are completing their studies with no jobs. There is a nexus between unemployment and insecurity.”

Orji said agriculture was a focal point of his agency. He said: “The NSIA pledges to work with governors to ensure that procurement is done professionally and on time.” He said the agency owned 52% by states, and 48% by the federal government, would play a leading role in the execution of the program.

SAPZ program implementation will begin effectively after this month’s launch and a completion of signing agreements.

Coming at a time the federal government is seeking to sufficiently diversify Nigeria’s economy away from crude oil dependence, the program promises to be far-reaching in helping Nigeria realize its full agricultural potential.

Fredrick Nwabufo is a writer and journalist.

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