Business

AfDB Set To Begin Disbursement Of $540m SAPZs Fund

Posted by: Quickresponse | February 5, 2024

...It is time to walk the talk, says VP Shettima

All is set for the African Development Bank (AfDB) to commence the disbursement of $540 million to the first phase of states in Nigeria for the development of Special Agro-Industrial Processing Zones (SAPZs).

This is just as Vice President Kashim Shettima called for immediate action, saying it is time for the government and its development partners to walk the talk.

As part of moves by the Nigerian government and the bank to ensure food security in the country, three states are to benefit from phase one of the development of processing zones, including Oyo, Kaduna and Cross River, while others are to get theirs as soon as they are through with documentation.

Senior Special Adviser on Industrialization to the AfDB President, Prof. Banji Oyelaran-Oyeyinka, disclosed this on Monday when a delegation of the bank and that of the United Nations Industrial Development Organization (UNIDO) presented their separate reports on the status of projects being executed in Nigeria to Vice President Kashim Shettima at the Presidential Villa.

Making AfDB’s presentation to the Vice President, Oyelaran-Oyeyinka said, “The Special Agro-Industrial Processing Zones (SAPZ) is an initiative of the African Development Bank that is aimed at turning the rural landscape into economic zones of prosperity and harnessing the power of commercial agriculture and food.

“The primary objective is to support inclusive and sustainable agro-industrial development in Nigeria. The phase one of the project is at the point of disbursement. Kaduna, Oyo and Cross River States are all in the process of receiving disbursements and we hope for the other states, they can speed up with their documentation so that we can fast-track these states.

“We raised $540,000,000 in catalytic funding and we expect every state to find a partner that will bring equity and join up with them. It is a government-enabled project but private-sector driven.

The SSA to the AfDB President further explained that the first phase of SAPZs is being implemented in seven states, namely Cross River, Imo, Kaduna, Kano, Kwara, Ogun, and Oyo, as well as the Federal Capital Territory (FCT).

“Ogun state found a partner for the project and decided not to take the loan. We are basically going to distribute the loan to the other states. The next thing is preparation for phase two with 27 states. The demand is enormous but we have to prioritise those who move fast.

“We have set up eligibility criteria for the states and to rank them. We expect them to have a feasibility report, environmental impact study and a commitment to counterpart funding,” Oyelaran-Oyeyinka added.

In another report on the visit to the Ajaokuta Steel Company Limited as earlier commissioned by the Vice President, the Head of Investment and Technology Promotion Office at the United Nations Industrial Development Organization (UNIDO), Abimbola Olufore Wycliffe, told VP Shettima that the recovery plan for the company would include revitalizing through rehabilitation, modernization and expansion.

She said, “Single-phase turnaround for the entire plant is challenging due to heavy investments and a prolonged revenue generation timeline. Convert the integrated steel plant into strategic business units (SBUs) to serve as profit centers.

“Conduct opportunity studies for each SBU, focusing on incremental investments, raw material availability, labor, utilities, and market demand. Prioritize SBUs with lower investments and quicker positive cash flows (the low-hanging fruits)”.

She further called for the reinvestment of profits from each SBU in ASC to reduce the burden of incremental investment on the Nigerian economy, even as she recommended the enhancement of foreign exchange earnings and contribution to local economic development in the country

In his response, Vice President Shettima called for immediate action, saying all hands must be on deck to ensure that the visions of President Bola Ahmed Tinubu are delivered to the Nigerian people.

Noting that it is time to walk the talk, the VP said, “We have passed the age of talking; we have to walk the talk. We can talk from now till eternity and it does not mean anything if there is no action and hence we must make this work. We just must.

“We have not seen beyond the depth of our pockets; what comes to us is more important than what comes to the generality of the people. Things must change.

“I read a book on how Korea transformed itself with no natural resources, how they started producing steel against all odds, how they went into shipbuilding; and how Hyundai, Daewoo, Samsung, Kia came about. I believe that when there is a will there is always a way. We have to walk the talk," the Vice President stated.