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AfDB grants US$210mn loan to Nigeria for agro-industrial zones

African Development Bank (AfDB) has announced to provide US$210mn loan to Nigeria to co-finance Phase 1 of the Nigeria special agro-industrial processing zone programme

The programme will help unlock Nigeria’s agriculture sector potential. It will promote industrialisation through the development of strategic crops and livestock.

AfDB financing for this programme represents one of the most ambitious operations of the bank in terms of scale and scope to date. It is made up of an AfDB loan of US$160mn and an Africa Growing Together Fund loan of US$50mn. Phase 1 of the project will target seven Nigerian states and the country’s Federal Capital Territory. It will 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 US$538.05mn.

“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 bank’s Board meeting. “We believe, these initiatives will make it easier for investors in agriculture,” Buhari added.

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. 

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.

AfDB group president Dr Akinwumi A Adesina said, “This first phase of the programme is not government-driven. It is government-enabled and private sector led. That is the critical way in which you have structural transformation of agriculture.”

AfDB’s Special Agro-Industrial Processing Zones is a flagship of the bank’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 mobilise private sector investment in the agro-industrial hubs and agricultural transformation centers.”

Often planned near secondary cities, the agro-industrial hubs are designed to revitalise peri-urban economies and create jobs for women, men, and young people. It includes a US$2mn 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.

Nigeria Phase 1 Zone construction is expected to augment the following value chain commodities:

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

Oyo State – cassava, soybean, rice