AfDB approves $210mn loan for Nigeria’s agro-industrial processing zones

15 Dec 2021
Financial Nigeria


The first phase of the project will be implemented with co-financing from other partners in the amount of $538.05 million.

AfDB President Akinwumi Adesina

The Board of Directors of African Development Bank (AfDB), on Monday, approved a $210 million loan for Nigeria, which the bank said could impact the lives of millions of people in Africa’s most populous country.

The loan will co-finance Phase 1 of the Nigeria Special Agro-Industrial Processing Zone Program in seven states and the Federal Capital territory. The program will help to unlock Nigeria’s agriculture sector potential. It will promote industrialization through the development of strategic crops and livestock, AfDB said in a statement it sent to Financial Nigeria.

The project is expected to support Nigeria’s efforts to raise agricultural productivity, promote investment, create wealth and jobs, and transform rural areas into corridors of economic prosperity. Its first phase will be implemented with co-financing from other partners in the amount of $538.05 million.

“We have several million hectares of available arable land and have embarked on the creation of Special Agriculture Processing Zones across the country,” Nigeria’s President Muhammadu Buhari told world leaders at the recent Future Investment Initiative Summit in Riyadh, ahead of the meeting by AfDB’s Board. “These initiatives, we believe, will make it easier for investors in agriculture.”

The Special Agro-Industrial Processing Zones Program is expected to bring economic infrastructure to rural areas of high agricultural potential. These zones will attract private agro-industrialist and entrepreneur investment, contribute to Nigeria’s economic and social development, and stem rural-to-urban migration. The project areas account for 19% of Nigeria’s total land mass and will benefit 50.4 million people. The states where the first phase of the program will be implemented were selected based on a readiness criterion as well as the need to ensure geographical balance across Nigeria’s six geo-political zones.

In addition to AfDB financing for Phase 1 of the Nigeria project, the Islamic Development Bank and the International Fund for Agricultural Development will provide parallel co-financing. Nigeria’s federal and state governments will contribute both in cash and in kind.

“This first phase of the program is not government-driven,” said AfDB Group President, Akinwumi Adesina. “It is government-enabled and private sector-led. That is the critical way in which you have structural transformation of agriculture. It is impressive to see a strong commitment from the Nigerian government – a very strong commitment from the Nigerian Minister of Finance and from all of the state governments because they have to give the land, they make sure that all the regulations and incentives are provided.”

The Special Agro-Industrial Processing Zones is a flagship of the AfDB’s Feed Africa Strategy. The bank plans to establish these zones in 18 African countries, including Nigeria. The zones are designed to concentrate production, processing, storage, transport and the marketing of commodities – like cotton or maize to increase productivity and competitiveness and reduce logistics costs.

The Director General of the bank’s Nigeria Country Office, Lamin Barrow, said: “Phase 1 of the Nigeria Special Agro-Industrial Processing Zones Program will mobilize private sector investment in the agro-industrial hubs and agricultural transformation centers. It will impact some 1.5 million households as direct beneficiaries, with a target of creating 400,000 direct jobs and up to 1.6 million indirect jobs.”

AfDB said its planned near secondary cities, the agro-industrial hubs are designed to revitalize peri-urban economies and create jobs for women, men, and young people. It includes a $2 million budget for a gender action plan that will provide agro-industrial hub gender-sensitive guidelines, workshops for women-led agricultural cooperatives, and capacity-building training for women, among other gender-focused priorities.

“Equitable employment and economic opportunities are a cornerstone of the Bank’s work. This program will target at least 50% women participation. The gender action plan will help ensure that there’s facilitation of broader lending to women,” said AfDB’s Vice President for Agriculture, Human and Social Development, Beth Dunford.

Nigeria Phase 1 of the agro-industrial processing zone project will cover the following state and agricultural value chains: Cross River State (cocoa, rice and cassava), Federal Capital Territory (beef and dairy livestock), Imo State (beef and dairy livestock), Kaduna State (tomato, maize and ginger), Kano State (rice, tomato, groundnuts and sesame oil), Kwara State (livestock), Ogun State (cassava, rice, poultry and fisheries), and Oyo State (cassava, soybean, rice).

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