Impact of Special Agro-Industrial Processing Zones on agriculture transformation

Agricultural analysts have repeatedly pointed out the relevance of the agro industry towards national development considering Nigeria’s natural capacity to produce a wide variety of crops, which could be processed into value-added products to enhance foreign earnings. The food processing industry has also been valued as a tremendous potential, considering the large raw material base that the country offers, along with a consumer base of over 100 million people.

Analysts argue that policy formulations and implementation have remained a major problem in the development of the country’s agro food Industry as the required processing techniques to convert raw commodities into processed goods are usually hampered because of non availability of necessary processing facilities, and when available the power required to run them is lacking or grossly insufficient. Other notable challenges include high post-harvest losses, slow technological innovation and adaptation, poor yield,significant deficits in support systems such as infrastructure, productivity-enhancing outputs, financial backing, commercial orientation, and effective related policies.
To address these issues, investors and market participants in the agricultural sector have suggested an improved agricultural investment framework capable of stimulating private sector investments to drive a market-oriented agricultural transformation. One of these initiatives, they stressed, is the development of Special Agro-Industrial Processing Zones (SAPZs) aimed at boosting the rapid development of modern agro-processing capacity in the country.

According to a report by the African Development Bank, Special Agro-Industrial Processing Zones are integrated development initiatives designed to concentrate agro-processing activities within areas of high agricultural potential to boost productivity, integrate production, processing and marketing of selected commodities. These zones, it explained, enable agricultural producers, processors, aggregators and distributors to operate in the same vicinity to reduce transaction costs and share business development services for increased productivity and competitiveness.

Commenting on this, Saviour Iche, president, Association of Micro Entrepreneurs of Nigeria (AMEN), noted that the establishment of Special Agro-Industrial Processing Zones would connect key actors in the value chain such as farmers, importers, exporters and logistics service providers that are vital to the development of the agriculture sector.

He added that the establishment of the special zones would bring many benefits to SMEs as more jobs would be created for the processing of farm produce for export, while packaging and food processing factories set up within such facilities would provide better quality jobs for the teeming populace.

Iche further averred that for the food processing sector to be efficient, infrastructural facilities should be located within the zones.The proximity to various ports, he stressed, will provide facilities and hinterland connectivity, thus ensuring a reduction in logistics costs.

Though the federal government recently divulged its partnership with the African Development Bank (AfDB), International Fund for Agricultural Development (IFAD), and other stakeholders to roll out Special Agro-Industrial Processing Zones (SAPZ) Programme aimed at concentrating agro-processing activities in demarcated areas across the country, it has been argued that failure to implement a well developed policy structure could swerve the programme from achieving the desired results.

Reacting to the development, Abuja Chamber of Commerce and Industry (ACCI) called on the federal government to ensure the integration and key participation of the private sector in the projected agro-processing programme.

In a statement signed by Al-Mujtaba Abubakar, ACCI president, the organisation asserted that agro-processing zones should be the responsibility and operational control of the private sector while the government provide the enabling framework, support and the environments to make the project thrive,noting that the private sector possesses the expertise and the experience to transform the dream of the government into reality in terms of a diversified economy with maximum efficiency.

According to the ACCI, the private sector has the qualities of less waste, transparent business model and value for money, adding that the programme will also gain from the time tested industry experience in the processing sub-sector while also leveraging on the extensive capacity of the private sector to drive a sustainable business model.

On his part, Sotonye Anga, coordinator, Agribusiness & Youth Empowerment, Community of Agricultural Stakeholders of Nigeria, tasked the federal government to expedite action on the setting up of the Special Agro-Industrial Processing Zones as well as agro commodities industrial clusters.

He explained that farmers needed such facilities where agricultural produce could be processed into grades for export to the overseas markets or sold in the local market.

“Without such facilities, which enable producers to enjoy sufficient economies of scale, some exports could become uncompetitive,” he warned.

The agribusiness strategist also said the programme, if properly structured, would provide facilities for cleaning, grading, sorting, specialised storage, pre-cooling, testing, packing and other services,and also support the development of the food-processing sector through the provision of centralised, modern facilities and equipment, including logistics and cold chain infrastructure.

“With the inclusion of trade free zones, the country’s position as a primary gateway for trade with other nations within the West African region will be enhanced,” he noted.