A $210m loan approved by the African Development Bank’s Board of Directors on Monday could impact the lives of millions of people in Africa’s most populous country, the bank said on Tuesday.
The loan will co-finance Phase 1 of the Nigeria Special Agro-Industrial Processing Zone Program and will unlock Nigeria’s agriculture sector potential.
It will also promote industrialization through the development of strategic crops and livestock.
African Development Bank said on Tuesday that its financing for this program represents one of the Bank’s most ambitious operations in terms of scale and scope to date.
The program is made up of an African Development Bank loan of $160m and an Africa Growing Together Fund loan of $50m. Phase 1 of the project will target seven Nigerian states and the country’s Federal Capital Territory.
The project 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 $538.05m
President Muhammadu Buhari had
told world leaders at the recent Future Investment Initiative Summit in Riyadh, that Nigeria has several million hectares of available arable land and had embarked on the creation of Special Agriculture Processing Zones across the country.
“These initiatives, we believe, 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 AfDB said the project areas account for 19 per cent 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 African Development Bank 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.
African Development Bank Group President Dr Akinwumi Adesina said: “This first phase of the program 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.
” 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 African Development Bank’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.