As per the bank’s most recent Implementation Progress and Results Report, dated January 30, 2025, which was accessed by The PUNCH on Sunday, a staggering 98.39 percent of the total loan remains undisbursed more than two years following the project's approval.
The SAPZS-I project received approval in December 2021 as part of a broader strategy to enhance agro-industrial development in Nigeria through the establishment of processing centers, the development of supporting infrastructure, and the enhancement of agricultural productivity.
However, the project has encountered considerable delays, prompting warnings from the AfDB and the implementation of corrective measures to expedite progress.
The report stated, “Procurement of supervision consultants for the DBO contractors is at RFP stage in the case of Kaduna State and REOI stage for Oyo, Imo and Cross River State Design Build and Operate bidding documents have been cleared for four states of Kaduna, Cross River, Oyo and Ogun states and Kaduna has already advertised its DBO. All these will result in improved implementation, disbursement, and rating in the year 2025. However overall performance status from the time of project approval to date is relatively slow, especially with respect to project disbursement.”
These developments are expected to enhance implementation, disbursement, and overall performance ratings in 2025. Nevertheless, the report indicates that the overall performance status since the project's approval has been relatively slow, particularly concerning disbursement.
As of December 2024, only 1.61 percent of the total loan amount of $210 million has been disbursed. The ADB was set to contribute $160 million of the total loan, while the Africa Growing Together Fund was to provide an additional $50 million.
Further investigations by The PUNCH revealed that the AGTF is a $2 billion facility backed by the People’s Bank of China and managed by the AfDB. Despite the availability of these funds, the disbursement process has been notably slow.
A detailed analysis of the figures reveals that only 1.93 percent of the African Development Bank's (AfDB) allocated loan has been disbursed, leaving a substantial 98.07 percent still undisbursed. In a similar vein, the African Guarantee Fund (AGTF) has achieved a disbursement rate of merely 0.58 percent, with 99.42 percent of its funds remaining unutilized.
The bank has pinpointed several critical issues contributing to the slow disbursement and execution of the initiative, including administrative inefficiencies, inadequate capacity among project personnel, and delays in procurement processes.
Additionally, the AfDB has expressed concerns regarding the sluggish progress in Imo State, which has yet to initiate any significant activities related to the project. In contrast, states such as Kaduna, Cross River, Oyo, and Ogun have made notable advancements, while Imo has fallen behind.
The bank has formally cautioned the Imo State Government to commence implementation without delay or face the possibility of losing its portion of the loan. The report indicates that the bank has communicated to the Imo State Government the urgency of starting activities, warning that failure to do so may lead to loan cancellation.
In a related development, the bank has instructed the Ogun State Government to establish an acceptable Service Level Agreement to secure ongoing funding. A service level agreement outlines the expected level of service from a vendor, detailing the metrics for measuring service performance and the remedies available if those standards are not met. This agreement is often a vital component of any technology vendor contract.
The potential for loan cancellation underscores the gravity of the situation and reflects the bank's increasing frustration with Nigeria's management of the project.
The bank has identified significant challenges in the agro-industrial growth project, primarily due to the limited capacity of the staff overseeing the initiative.
The National Project Coordinating Unit and the Participating State Implementing Units have been found to lack the necessary expertise for effective management of financial resources, procurement, and environmental and social safeguards.
To mitigate these issues, the bank has assigned two seasoned consultants to assist project personnel in fulfilling the bank’s fiduciary standards.
Given the inadequate capacity at the Participating State Implementing Units and the National Project Coordinating Unit, the bank is offering comprehensive support to both the National Coordinating Office at the federal level and the PSIUs in areas such as financial management, procurement, and environmental and social safeguards, complemented by regular technical workshops on fiduciary requirements.
Additionally, the bank has provided two more experienced consultants to support and guide project staff in executing project activities.
The bank's assessment of the project's performance reveals that it has not met anticipated outcomes.
Although the development objective rating has improved from 'unsatisfactory' to 'satisfactory,' the implementation progress continues to fall short of expectations.
The report notes delays in procurement, with only Kaduna state progressing to the Request for Proposals stage for its Design-Build-Operate contract, while Oyo, Imo, and Cross River states remain at the Expression of Interest stage.
Originally, the project aimed to create 500,000 jobs and attract $1 billion in private sector investments, yet there has been no significant advancement in these areas.
Furthermore, the report indicates that no substantial work has commenced on energy provision, administrative buildings, optical fiber installations, or feeder roads, raising concerns about the project's overall viability.
To tackle the slow progress, the bank has rolled out a bunch of corrective actions to speed things up. These actions involve bringing in consultants for technical support, speeding up procurement, working with state governments to make sure everything's on track, and requiring quarterly project updates.
The AfDB has also highlighted the importance of keeping a close eye on things to spot and fix any issues that come up. The SAPZS-I project, designed to be a game-changer for Nigeria’s agricultural sector, is currently at a pivotal point.
The African Development Bank's concern regarding the slow implementation and disbursement underscores the critical need for immediate action to ensure project objectives are met. Significant project milestones remain unmet, with the majority of the loan
In conclusion, the bank's assessment indicates project implementation delays. Despite approval on December 13, 2021, effectiveness was not achieved until October 17, 2023, with initial disbursements to states contingent upon fulfilling prerequisite conditions. Four states received their first disbursements by June 2024 (8.25 months post-effectiveness), while Ogun State executed its service level agreement in October 2024. Major civil works procurement (design-build-operate contractors and supervision consultants) is underway, bidding documents are finalized for Kaduna, Cross River, Oyo, and Ogun states, with Kaduna State's design-build-operate process nearing completion and ready for evaluation. Project activities are progressing, and current projections indicate timely achievement of outputs and outcomes.
During the October 2022 SAPZ program launch, African Development Bank President Dr. Akinwumi Adesina stated that the initiative would mitigate rural-to-urban migration, increase fiscal capacity, and foster the development of competitive agricultura
He stated that the SAPZ initiative would facilitate the transformation of Nigeria's rural economies, fostering a shift from economic hardship to prosperity and enhancing wealth
Adesina expressed his enthusiastic support for the successful establishment of the Special Agro-Processing Zones (SAPZs) in Nigeria. The African Development Bank (AfDB) is providing $210 million in funding for the development of these zones.
This initiative benefits from a collaborative partnership with the Islamic Development Bank, contributing $150 million, and the International Fund for Agricultural Development, providing an additional $160 million. The SAPZ program in Nigeria represents the largest such undertaking in Africa.
The African Development Bank Group has recently facilitated the mobilization of $2.2 billion to support the second phase of Nigeria’s Special Agro-Industrial Processing Zones initiative, despite the challenges faced during the initial phase of the program.
This announcement was made at the Africa Investment Forum in Morocco, where Nigerian state governors, representatives from multilateral development organizations, diplomats, and private sector investors convened to express their backing.
According to a statement from the bank, Phase I of the SAPZ program is already yielding benefits for states including Cross River, Imo, Ogun, Oyo, Kaduna, Kwara, Kano, and the Federal Capital Territory.
The second phase aims to extend its reach to 24 additional states over the next three years, further integrating Nigeria’s agricultural sector with agro-industrialization to stimulate economic growth.
Dr. Akinwumi Adesina, President of the African Development Bank, stated that this marks a pivotal moment for Nigeria's agricultural transformation. The Nigeria SAPZ II project is poised to generate millions of jobs, empower smallholder farmers, and establish Nigeria as a leader in agro-industrialization. These investments underscore the effectiveness of collaborative efforts in achieving sustainable development across Africa.