The Special Agro-Industrial Processing Zones (SAPZ) program is a flagship African Development Bank initiative. The zones bring together the production, processing, storage, transport, and marketing of commodities - including cotton and maize. This will increase productivity and competitiveness and reduce logistics costs.
The program has four broad components: support for the development of enabling climate-adapted infrastructure for agro-industrial hubs; improving agricultural productivity and enterprise development to enhance value chains and job creation in the SAPZ catchment areas; supporting agro-industrial zone policy and institutional development, and program coordination and management.
The African Development Bank is developing SAPZs in 18 African countries. Among the projects under implementation, there is one each in Côte d'Ivoire, Guinea, Mali, Madagascar, Senegal, and Togo, and four in Ethiopia.
The SAPZ program in Nigeria is the largest, both in scale and scope. Phase 1 is being implemented over five years, beginning in 2022. This is in seven states: Cross River (cocoa, rice, and cassava); Imo (beef and dairy livestock); Kaduna (tomato, maize, and ginger); Kano (rice, tomato, groundnuts, and sesame oil); Kwara (livestock), Ogun (cassava, rice, poultry, and fisheries); and Oyo (cassava, soybean, rice). It is also being rolled out in the country's Abuja Federal Capital Territory (beef and dairy livestock). The program will later be rolled out in more states. States participating in the first phase were chosen based on readiness and to achieve a balance across Nigeria's six geo-political zones.
The project areas cover 19% of Nigeria's land mass and 50.4 million of the country's population. Key expected outputs of the first phase are infrastructure development for eight agro-industrial processing hubs and fifteen agricultural transformation centers. Phase one connects 2,300 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.
The African Development Bank and key development partners are co-financing the first phase for a value of $538.05 million. The African Development Bank is providing $210 million. The Islamic Development Bank and the International Fund for Agricultural Development are jointly contributing $310 million. The Nigerian government is providing $18.05 million.
Given Nigeria's enormous potential for agriculture, the SAPZ program will help strengthen the country's agricultural supply chain. It supports sustainable agro-industrial development and unlocks the country's agriculture sector to promote industrialization by developing value chains for strategic livestock and crops, including rice, cassava, and tomatoes.
The program will enhance the competitiveness of key selected value chains. It will achieve this through increased production, aggregation, and processing activities driven by private-sector investments.
About 1.5 million households are expected to benefit directly throughout the agricultural value chain. This includes private agribusinesses, agro-processors, smallholder farmers, agripreneurs, and agro-dealers. SAPZs will create at least 400,000 direct jobs, and a further 1.6 million indirect jobs during construction and the operational phase. Micro, small, and medium enterprises, including factories, along the value chain will create most of the jobs, along with tenant industries in the agro-industrial hubs.
Additional Information:
Special zones have proven to be successful models for economic transformation. For instance, the ARISE IIP business is operating the successful $1 billion forestry-based Nkok special economic zone in Gabon, with over 100 international investors in the zone, having invested over $1.7 billion (not funded by the African Development Bank).
Ethiopia has 24 industrial parks. The African Development Bank is supporting a few agro-industrial zones there.
There are also zones in Nigeria that have been productive, including the Ogun-Guandong Free Trade Zone in Igbesa (OGFTZ) Ogun State. This free zone places a lot of emphasis on the processing and manufacturing sectors. The three main industries are ceramics production, manufacturing of lightweight items, and furniture production. The OGFTZ is concentrating on growing its presence in the engineering, marketing, and trade sectors in the long run.
The SAPZ is distinctive in that it concentrates on agricultural products in peri-urban areas to create many jobs for youth, lowering rural poverty and insecurity, and promoting rural industrialization.
