The African Development Bank (AfDB) has raised concerns over the slow progress of Nigeria's Special Agro-Industrial Processing Zones (SAPZ) project, warning that 98.39% of the $210 million loan allocated for the initiative remains undisbursed more than two years after approval.
According to the bank's Implementation Progress and Results Report, dated January 30, 2025, only 1.61% of the total loan had been disbursed as of December 2024, highlighting administrative inefficiencies, weak project management, and procurement delays.
Project Delays and Loan Disbursement Issues
The SAPZ Phase I project, approved in December 2021, aims to boost Nigeria's agro-industrial sector by establishing processing hubs, supporting infrastructure, and improving agricultural productivity. However, implementation has been sluggish.
A breakdown of the loan disbursement shows:
AfDB's $160 million share: Only 1.93% disbursed, with 98.07% yet to be utilized.
Africa Growing Together Fund's $50 million share: Only 0.58% disbursed, leaving 99.42% unused.
The report identifies administrative bottlenecks, weak capacity among project staff, and slow procurement processes as key hurdles.
State-Specific Challenges and AfDB Warnings
The AfDB has specifically warned Imo State for failing to commence any significant activities under the project, unlike Kaduna, Cross River, Oyo, and Ogun, which have made some progress.
"The Government of Imo State has been notified to start activities immediately, or the bank will proceed with a cancellation of the loan," the report stated.
Additionally, the bank has directed Ogun State to submit a Service Level Agreement (SLA) to secure continued funding.
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Unmet Milestones and Project Risks
The SAPZ-I project was initially expected to:
Generate 500,000 jobs
Attract $1 billion in private sector investments
Develop critical infrastructure such as energy, administrative buildings, fiber-optic networks, and feeder roads
However, the report highlights that no significant progress has been made on these objectives.
AfDB's Corrective Measures
To address these challenges, the bank has deployed:
Two experienced consultants to support project teams
Technical assistance for financial management, procurement, and environmental safeguards
Quarterly project updates and close monitoring to fast-track implementation
While the development objective rating has improved from "unsatisfactory" to "satisfactory," implementation progress remains below expectations.
Future Prospects: SAPZ Phase II Expansion
Despite setbacks in Phase I, the AfDB recently facilitated the mobilization of $2.2 billion for the second phase of the SAPZ initiative. Phase II will expand the program to 24 additional states over the next three years, further integrating Nigeria's agriculture with agro-industrialization.
AfDB President Dr. Akinwumi Adesina described the project as a "defining moment" for Nigeria's agricultural transformation, with the potential to create millions of jobs and drive economic growth.
However, with nearly the entire Phase I loan still undisbursed, the bank's warnings signal a critical need for urgent action to salvage the project and meet its objectives.
