Nigeria’s $210m Agro-Industrialisation Project Stalls Amid AfDB Concerns
The African Development Bank (AfDB) has raised alarms over the sluggish implementation of Nigeria’s Special Agro-Industrial Processing Zones (SAPZ) initiative, with the majority of the allocated $210m loan remaining unutilised more than two years after approval.
A recent Implementation Progress and Results Report from the bank, dated 30 January 2025, reveals that 98.39% of the loan remains undisbursed, underscoring the slow pace of execution in a project designed to drive agricultural industrialisation through dedicated processing hubs and supporting infrastructure. The initiative, approved in December 2021, was envisioned as a catalyst for economic transformation in Nigeria’s agricultural sector.
The report details how procurement and contracting processes have moved at a snail’s pace. While Kaduna State has made some progress, having advertised its Design-Build-Operate (DBO) contracts, Oyo, Imo, and Cross River states remain at preliminary stages. With only 1.61% of funds disbursed as of December 2024, the AfDB is growing increasingly impatient.
Administrative inefficiencies and weak project management capacity have been flagged as key obstacles. The bank notes that project staff at both the national and state levels lack the expertise required to efficiently oversee financial management, procurement, and environmental safeguards. These deficiencies, compounded by bureaucratic red tape, have left the SAPZ-I project teetering on the brink of failure.
Imo State has drawn particular scrutiny, with no substantive progress recorded. Unlike Kaduna, Cross River, Oyo, and Ogun states, where some groundwork has commenced, Imo has yet to launch any major activities. In a stern warning, the AfDB has informed the state government that failure to kick-start implementation could result in its portion of the loan being cancelled.
“The Government of Imo State has been advised to begin activities immediately, failing which the bank will recourse to a cancellation of the loan,” the report states.
Further complicating matters, Ogun State has been instructed to produce a satisfactory Service Level Agreement to ensure continued funding. The agreement is expected to outline key performance indicators and service benchmarks that must be met.
The AfDB’s frustration is evident in its decision to deploy additional consultants to support project staff and provide ‘handholding’ on financial management and procurement. Despite these remedial actions, the overall project performance remains lacklustre. While the initiative’s development objective rating has improved from ‘unsatisfactory’ to ‘satisfactory,’ implementation continues to lag behind expectations.
Originally projected to create 500,000 jobs and attract $1bn in private sector investment, SAPZ-I has yet to deliver tangible results. The report notes that crucial infrastructure components—including energy supply, administrative buildings, fibre-optic connectivity, and feeder roads—remain largely unbuilt, raising serious concerns about the project’s long-term viability.
To address these setbacks, the AfDB has introduced a series of corrective measures, including fast-tracking procurement, enforcing quarterly project updates, and intensifying engagement with state governments. The bank has also warned that close monitoring will be essential to keep the project on track.
Despite these challenges, the SAPZ initiative remains central to Nigeria’s agricultural industrialisation agenda. The first phase of the programme, which includes Cross River, Imo, Ogun, Oyo, Kaduna, Kwara, Kano, and the Federal Capital Territory, was launched with high expectations. However, its sluggish execution has cast doubt over the country’s ability to harness the full potential of the initiative.
Dr Akinwumi Adesina, President of the AfDB, had lauded the SAPZ programme at its inauguration in October 2022, predicting that it would curb rural-to-urban migration, enhance agricultural value chains, and expand economic opportunities. “The SAPZ will transform rural economies from zones of economic misery to zones of economic prosperity,” he said at the time.
Yet, with the first phase struggling to gain momentum, attention has shifted to the second phase. The AfDB recently announced that it had facilitated the mobilisation of $2.2bn to fund SAPZ-II, which will expand the initiative to 24 additional states over the next three years. This second phase, revealed at the Africa Investment Forum in Morocco, has attracted interest from state governors, multilateral development organisations, and private sector investors.
Speaking on the sidelines of the forum, Adesina reaffirmed the bank’s commitment to Nigeria’s agro-industrialisation drive: “The Nigeria SAPZ II project will create millions of jobs, empower smallholder farmers, and position Nigeria as a leader in agro-industrialisation.”
Whether the first phase can overcome its inertia and deliver on its lofty promises remains an open question. The AfDB’s willingness to deploy additional support and introduce stricter oversight suggests a last-ditch attempt to salvage the project. Yet, without swift and decisive action from Nigerian authorities, the SAPZ initiative risks becoming another cautionary tale of stalled development ambitions.
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