SAPZ: Industrialising Nigeria’s agriculture, a shortcut to food and national security

Nigerian Agriculture has been on the crossroad as high cost of food and scarcity of raw materials continued to dash blows on the country’s economy. Insecurity partly because of lack of jobs for the youth is on the high increase.

In 2022, the Special Agro-Industrial Processing Zones (SAPZ) was launched to industrialize Nigerian agriculture, through localization of production and processing to zones where the commodities have comparative advantage.

SAPZ is part of a strategic initiative in Nigeria aimed at promoting agricultural industrialization. The concept involves creating designated zones where agribusinesses can operate efficiently, benefiting from infrastructure, services, and policy support.

The African Development Bank is playing a positive role in catalyzing agriculture in Africa into an internationally competitive sector and an important contributor to sustainable development.

At its core of this transformation, the Bank is working with governments and the private sector in 11 African countries with Nigeria inclusive to create Special Agro-Industrial Processing Zones (SAPZ) that will turn the rural landscape into economic zones of prosperity and harnessing the power of commercial agriculture and food production.

The SAPZ program, which is supported by the African Development Bank, International Fund for Agricultural Development, and Islamic Development Bank, targets increased agricultural productivity and competitiveness.

With implementation already underway in seven states, the program is expected to create 400,000 direct jobs and 1.6 million indirect jobs.

Additionally, the SAPZ programme aims to improve food security by adding metric tons of food to the nation’s food basket. Staple crop yields are expected to increase by 50-100 per cent, up from current levels of 5-10 per cent. Post-harvest losses will also be reduced from 45 per cent to 20 per cent.

The Vice President noted that the SAPZ initiative, supported with counterpart funding from development partners and the private sector, is designed to address challenges that have long hindered the growth of Nigeria’s agricultural economy, including inadequate processing infrastructure, limited access to markets, and rural unemployment.

“For far too long, our farmers have contended with poor infrastructure, lack of access to finance, and inadequate processing facilities. This zone is designed to confront those challenges head-on by creating an ecosystem where innovation, investment, and collaboration thrive,” he noted.

During the recent groundbreaking ceremony of the establishment of SAPZ in Cross River State, Vice President Kashim Shettima explained that the Calabar SAPZ will serve as a hub for agro-processing and storage, providing farmers and agripreneurs with critical infrastructure to scale their operations and tap into local and international markets.

“This is where farmers will meet with private investors, where ideas will turn into enterprise, and where our youth will find meaningful opportunities,” he said, disclosing that the Tinubu administration has classified SAPZ as a priority program in Nigeria’s quest for food security, with plans to institutionalize it as a government agency that will facilitate agricultural industrialization across all 36 states.

“These zones will generate thousands of jobs. They will create opportunities for young people, empower them with skills and knowledge to engage in meaningful work and help them contribute positively to the economy. Cross Riverians, development has come to your doorstep. For you and for the country, SAPZ is a game changer—one that will enable Nigeria to diversify its economy with a sustainable source.,” he stated.

In his remarks, the President of AfDB, Dr Akinwumi Adesina, reiterated the bank’s pledge to mobilize $2.2 billion to execute the SAPZ project in 28 states across Nigeria.

Adesina highlighted that Cross River State has a significant role to play in Nigeria’s agricultural transformation because of the vast production of cocoa, cassava, rice and banana in the state, saying Obudu Cattle Ranch alone can turn the state into a huge livestock producer.

He also acknowledged that the state is ideal for SAPZ because it has an export processing zone, ports facility, and export handling capabilities, adding that the SAPZ in Calabar can easily be linked to the seaport for the transportation of processed agricultural commodities to the export market in neighbouring countries, including Cameroon and the rest.

“The African Development Bank, as you know, is spearheading this together with our partners, which include the Islamic Development Bank and the International Fund for Agricultural Development, and we have put together $934 million from the African Development Bank, with core financing of $938 million from these partners.

“The first phase of SAPZ in Nigeria will be in eight states of Cross River, Kaduna, Kano, Katsina, Oyo, Ogun, Kwara, Imo and the Federal Capital Territory. We are delighted with our partnership with the Islamic Development Bank and the International Fund for Agricultural Development.

“We have put together a financing package of $510 million to make this work. We expect, in the second phase of this, to mobilize $2.2 billion to be able to work for 28 states across the federation with several partners,” the AfDB President said.

Also, recently, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said that the success of the Special Agro-Industrial Processing Zones (SAPZ) programme is pivotal to stabilizing and growing Nigeria’s economy.

Edun who was speaking at the SAPZ-1 High Level Implementation Acceleration Dialogue and State Steering/Technical Committee Workshop organized by the Federal Ministry of Agriculture and Food Security, in collaboration with Development Financing Institutions (DFIs), including the African Development Bank (AfDB), International Fund for Agricultural Development (IFAD) and the Islamic Development Bank (IsDB), expressed confidence that the SAPZ programme will achieve its potential, driving Nigeria’s agro-industrial development and modernizing the economy.

The aim of the SAPZ is to produce more food, create jobs and contribute to the economy of Nigeria. If these things are achieved, Nigeria will be finding its way out of food insufficiency, insecurity. This is because the majority of the youth who engage in social vices would be engaged in this huge agricultural project.

Recently, while addressing the concerns of National Assembly North-East Caucus over perceived exclusion of the region from SAPZ, the Minister of Agriculture and Food Security, Senator Abubakar Kyari, explained that the SAPZ program was launched in 2022 based on its conceptual design of Phase 1 in 2019.

He said the project is a Federal Government enabled initiative with subscription by the State Governments of the Federation. Therefore, all State Governments were expected to individually Express Interest in the program.

The Minister further explained that in 2019, each state governor was notified in writing to express interest with an attached eligibility criteria that will enable them to participate in phase 1 of the program.

“Upon receipt of their expression of interest, a joint team comprising the Federal Ministry of Agriculture, Federal Ministry of Finance, and the Development Finance Institution, in this case the African Development bank conducted a mission to each of the states to verify the fulfillment of the eligibility criteria as a selection process. This stage got 8 States that qualified namely: Kaduna, Kano, Kwara, Oyo, Ogun, Imo, Cross River, and FCT.

However, upon the assumption of office by this administration, we reviewed the development potential of this program under the renewed hope agenda of Mr. President and decided that no state will be left behind.

“Consequently, the Vice President’s first international mission was to Rome, Food System Summit where he galvanized more funding to enable us to take more states. He also embarked on a second mission to the World Food Price meeting in Des Moines, Iowa, USA where he obtained a commitment of 1 billion USD from the President of the African Development Bank (AfDB) for the sole purpose of bringing on board more states.

Throwing more light on the funding process of the project, Kyari said the SAPZ is a Subsidiary Loan Agreement Program, this means that the Federal Government onboards the obtained loans to the state for the implementation of the program.

He said considering this is a loan, it is solely the discretion of the state to participate or not, and we have cases where states have not expressed interest.

The agric Minister however noted that the overall policy directive of Mr. President is that all States must be brought on board. However, he said this will be in phases.

“We are convinced that as other states see the actuality of this project, they get more interested and therefore express their interest in being the first stage of being onboarded. Perhaps, this is the case with the North East Caucus seeing two landmark events being held back-to-back in Kaduna and Cross River States.

“The Phase 2 of the Program had already commenced in earnest. I have personally communicated to all the states that are not in phase 1 in written notifying them of the program and to express interest.

“Consequently, we have received Expression of Interests from 27 States but only 10 States fully complied with the eligibility criteria which includes three States from the North-East namely Gombe Borno and Bauchi States for the first tranche of phase 2 as they will be 3 tranches of onboarding states in the phase”, he added.

It is pertinent that all states key into this agricultural project as it will be a catalyst for industrialization, improving internally generated revenue for states, job creation and to an extent reduce insecurity through engaging the youth meaningfully.