The African Development Bank (AfDB) has described the performance of the first phase of Nigeria’s $210 million Special Agro-Industrial Processing Zone (SAPZ) programme as “problematic.”
In its latest Implementation Progress and Results Report (IPR), the bank assigned an unsatisfactory rating to the project, coded P-NG-AAA-002, citing slow implementation and disbursement challenges.
The AfDB approved a $210 million loan in December 2021 to co-finance the first phase of Nigeria’s SAPZ programme, comprising $160 million from the bank and $50 million from the Africa Growing Together Fund. The initiative aims to unlock Nigeria’s agricultural potential and drive industrialisation by developing strategic crops and livestock.
This phase of the project focuses on seven states—Ogun, Oyo, Imo, Cross River, Kano, Kaduna, and Kwara—as well as the Federal Capital Territory (FCT). However, the bank noted that progress since approval has been sluggish, particularly in fund disbursement.
According to the report, procurement processes for supervision consultants under the Design, Build, and Operate (DBO) model are at different stages. Kaduna has reached the Request for Proposal (RFP) phase, while Oyo, Imo, and Cross River are still at the Request for Expression of Interest (REOI) stage. DBO bidding documents have been cleared for Kaduna, Cross River, Oyo, and Ogun, with Kaduna already advertising its DBO contract.
The AfDB expects these steps to improve implementation, disbursement, and project ratings by 2025. However, it maintained that overall progress has remained slow since approval, particularly in disbursement.
Key challenges include weak capacity at state project implementation units (PSIUs) and the national project coordination unit (NPCU). The bank has outlined corrective measures, including providing technical support in financial management, procurement, and environmental and social safeguards. Two experienced consultants have also been deployed to support project staff.
The report highlighted significant delays in implementing Imo State’s activities and the need to revise the service legal agreement (SLA) for Ogun State as major risks affecting the project. The AfDB urged the Imo government to expedite project activities, warning that prolonged delays could lead to loan cancellation. Similarly, Ogun State must submit an acceptable SLA by March 31.
On project output ratings, the AfDB pointed out that effectiveness delays have hindered progress. Though the project was approved on December 13, 2021, it only became effective on October 17, 2023. The first disbursements to states occurred between eight to fourteen months after project effectiveness, with Ogun signing its SLA in October 2024. Major civil works procurement has now commenced, and activities leading to key project outcomes are on track.
Despite these setbacks, the AfDB noted that the project is progressing toward the execution of major works, which will help achieve its intended development objectives.
On December 11, 2024, the bank announced that it had facilitated $2.2 billion in capital mobilisation for the second phase of the SAPZ programme.
Thursday, February 20, 2025
