Special agro-industrial processing zones: An initiative to transform Nigeria’s agricultural sector.
In a two-day event which started yesterday, the President of Nigeria, Muhammadu Buhari, jointly with the African Development Bank (AfDB), the Islamic Development Bank and the International Fund for Agricultural Development, launched the Special Agro-industrial Processing Zones (SAPZ) initiative for Nigeria.
The launch heralds the implementation of SAPZ phase 1, expected to begin operation in Kano, Oyo, Kaduna, Imo, Cross River, Ogun and Kwara states. The development cements Nigeria’s commitment to transforming its agriculture sector, which holds so much economic significance and harbours enormous unexplored potential.
As of 2021, Agriculture contributed about 23.7 per cent to the country’s GDP and employed about 35 per cent of the population. Nigeria has about 79 million hectares of agricultural land, with only 44 per cent cultivated. To maximise this potential infrastructure and finance are critical. And this is one of the offerings of the SAPZ project.
The first phase of the Nigeria SAPZ program is co-financed by key development partners to the tune of $538.05 million. The African Development Bank is providing $210 million. The Islamic Development Bank and the International Fund for Agricultural Development will provide a combined $310 million in funding, while the Nigerian government is contributing $18.05 million.
What is SAPZ, and why is it important?
The SAPZ programme involves the rehabilitation or development of infrastructure and provision of ancillary services to set up agro-industrial hubs and agricultural transformation centres, develop strong agro linkages with small-scale farmers, and aggregation centres in rural areas with high agricultural potential.
To put simply, the project would enable farmers, processors, producers, aggregators and distributors to work together in one location. This presents various benefits to players in the sectors.
First, many farms in the country are situated in rural area. However, agro-industries are not situated in such areas. Dr Akinwumi Adesina, president of the African Development Bank, explained that “food processing companies in Nigeria and most other African countries are not located in rural agrarian areas, largely because there is no infrastructure, which is integral to their operations,”
“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 revitalise agriculture as the viable business that it is,” he said.
With the initiative, there would be lower costs, increased productivity and competitiveness amongst vital stakeholders in the agricultural value chain. Also, infrastructures like electricity and the internet enable farmers in rural communities to have a chance to leverage climate-smart technology innovations presently disrupting the global agricultural space. All these would largely contribute to achieving food security in the country.
Additionally, the programme is estimated to benefit 1.5 million households and create 400,000 direct jobs and up to 1.6 million indirect jobs. This is crucial for a country where much of its vibrant population is unemployed. The flagship initiative is yet another feather to the sector’s cap as the largest employer of labour in the country.
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