Nigeria’s farming ecosystem has traditionally been localised, with smallholders living close to their land. Surplus produce is generally transported to local markets, but farmers face several challenges when greater distances are involved. These are often a result of the state of roads or rail connections, security issues or bad weather, with the latter becoming increasingly prevalent due to climate change. Moreover, farmers need to move products to distant areas that have factories, mills and cold storage chains to be able to access the value-added food processing sector. In October 2022 the government launched Special Agro-Industrial Processing Zones (SAPZ) in Abuja to address some of these logistical challenges.
Plans & Policies
The SAPZ programme builds on the success of the Staple Crop Processing Zones launched in 2013. It aimed to construct and develop agro-processing clusters close to the source of raw materials. The agricultural segments targeted by the programme included rice, sorghum, cassava, fisheries, horticulture and livestock. Nigeria also established industrial zones for other sectors that have been successful, with the Ogun-Guandong Free Trade Zone (OGFTZ) being a leading example. The OGFTZ operates in the field of ceramics, furniture and other light manufacturing activities.
The SAPZ programme is led by the African Development Bank (AfDB). The AfDB will work with the Nigerian government, the International Fund for Agriculture Development (IFAD), the Islamic Development Bank (IDB), state governments and the Nigeria Sovereign Investment Authority, the country’s sovereign wealth fund. The first phase of the SAPZ programme will be rolled out over 24 months. It will receive $210m of funding from the AfDB, $310m from the IFAD and IDB, and $18.1m from the federal government. The programme targets projects in seven states plus the capital territory, with 19 more states set to join in phase two.
Launch Pad
The first phase will focus on the dominant crops in each state. The zone in Cross River will target the production of cocoa, rice and cassava; Imo will target beef and dairy livestock; Kaduna will focus on tomatoes, maize and ginger; Kano on rice, tomatoes, groundnuts and sesame oil; Kwara on livestock; Ogun on rice, cassava, poultry and fisheries; Oyo on cassava, soybeans and rice; and the Abuja Federal Capital Territory on beef and dairy.
The phase will link 2300 ha of irrigated land and farms to better road connections as well as introduce skill development programmes for micro-, small and medium-sized enterprises; facilitate extension services; and ensure a steady supply of certified products. A special regulatory regime aimed at encouraging investment will also be established. Investors in food production and processing already receive five-year tax and duty free holidays, taxfree loans and zero-tariff rates on the import of agro-chemicals, thanks to regulations introduced by the federal government in October 2022.
The SAPZ programme is expected to benefit some 1.5m households across the country, as well as create at least 400,000 new jobs directly and 1.6m indirect jobs through secondary areas such as construction. The programme also targets sustainability and gender empowerment, with many of these jobs likely to go to women and youth. It will also work to develop human resources and mobilise private sector investment in the sector. The implementation of the programme will be monitored by the AfDB and other stakeholders.
The establishment of SAPZs is expected to be an important step forwards for the sector. Indeed, these zones will provide infrastructure, a supportive regulatory environment and security, all of which agro-industrial companies need in order to thrive.
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