Faster Implementation of SAPZ will lead to Faster Transformation of Nigerian Economy
Interview with Professor Banji Oyelaran-Oyeyinka Senior Special Advisor to the President on Industrialization, African Development Bank (AfDB).
In this exclusive interview, we sit down with Professor Banji Oyelaran-Oyeyinka, a globally renowned development economist and the Senior Special Advisor to the President on Industrialization at the African Development Bank.
With decades of experience in innovation systems, industrial policy, and economic transformation, Professor Oyelaran-Oyeyinka shares deep insights into Africa’s industrialization journey, the role of policy in driving inclusive growth, and AfDB’s strategic efforts to catalyze industrial development across the continent.
His perspectives provide a valuable roadmap for stakeholders seeking to unlock Africa’s economic potential through structural transformation and innovation-driven development.
QUE: The AfDB President recently praised your significant influence in the SAPZ initiative. Could you share the background of this project and how it culminated in the groundbreaking ceremonies in Calabar and Kaduna last week?
Let me start by stating the facts on the origin of the Special Agro-Industrial Processing Zones (SAPZ) programme. It was first conceived as the Staple Crop Processing Zones (SCPZ) by Dr Akinwumi Adesina during his tenure as Nigeria’s Minister of Agriculture and Rural Development (2010–2015). A key pillar of the Agricultural Transformation Agenda, the SCPZ programme, a concept designed by the Minister, had identified six locations and was well underway under the Minister’s leadership, with partnerships established with international agencies. Time constraints prevented full implementation during Dr Adesina’s tenure, and the program soon ran into a moral hazard problem.
There were two dimensions to this. First, the minister that came after Dr. Adesina deprioritized the program. It set us back thirteen years! When leaders make decisions that benefit themselves, or a group, irrespective of the broader national objective and enormous prior costs, society bears the negative consequences.
The second dimension is the lack of accountability in the management of public resources. Take the first SCPC case where Dr. Adesina had already attracted a global conglomerate that was ready to invest $200 million at Alape in Kogi State. The program was peremptorily cancelled in spite of all the capital and human resources invested. One can multiply this case a hundred times across ministries. We need to put in place stronger governance structures, effective internal controls and robust oversight mechanisms that can help ensure that leaders are held accountable for their actions.
When I was appointed as Senior Special Adviser on Industrialization to President Adesina, he spelled out his priorities- with the SAPZ – clearly central. I sensed how deeply he cared for this program. We had several discussions on it and working with the operational people, I came up with my own ideas on both the policy and practice of the SAPZ.
I evolved this based on my many years of research, teaching and practice on industrial clusters and agglomeration theory. Economic ‘clustering’ is the aggregation of firms and other actors within a geographic space. I have written several books and journal papers on this. So here we are, me, a global expert on industrialization working with Dr. Adesina, a renowned global expert on agriculture.
However, beyond the theoretical, implementation confronted massive complexities: the interrelatedness of humans, systems, laws and vested interests. Maybe the story shall be fully told one day. Suffice it to say for now that the variety of human agents which one must inevitably work with, contributes to the complexity of the SAPZ including avoidable delays, misinformation and self-sabotage. I believe Dr. Adesina, given his experience in all this, understands perfectly what I and the team have gone through. It is why he praised us at the Calabar groundbreaking I believe.
QUE: Now that the groundbreaking has taken place, what is the expected timeline for the completion of infrastructure and the commencement of production within the zones?
The states that recently conducted groundbreaking, and others like Imo and Oyo will follow soon, are expected to commence construction soon. The process will proceed in phases. We expect phased completion and production within eighteen months.
At the practical level, the Special Agro-Industrial Processing Zones (SAPZs) is strategically established in peri-urban locations, integrating production, processing, storage, transport, and marketing. It is where complexity sets in.
The aim is to transform agriculture into a high-value industry, foster productivity, enhance market access, and attract private sector investment into key agricultural value chains.
The model prioritises commodities with high potential for boosting export revenues or reducing import dependence.
We also designed it to complement existing and completed African Development Bank-financed projects in power, transport, water, and agriculture in a way that creates a cohesive development framework that accelerates industrial growth and economic transformation.
QUE: What are the key benefits of the Special Agro-Industrial Processing Zones to Nigeria’s economic development, especially in terms of job creation and food security?
There are several benefits and the expected outcomes informed the structure of the model. A critical novelty of the SAPZ is the creation of the Agricultural Transformation Centre (ATC). ATCs are strategically positioned within agricultural regions to collect produce from local farmers.
These centres either supply the Agro-Processing Hub (the contiguous factory system) for further processing or distribute the products to high-demand markets for consumer sale.
Located within farming communities, ATCs provide crucial support services to farmers, including crop drying, cold storage, warehousing, equipment rental and maintenance, grading, storage, processing to extend product shelf life, as well as livestock and fish handling, meat packing, food quality and safety certification, and marketing platforms.
Another unique aspect of the framework is the establishment of Agro-Processing Hub (APH): An Agro-Processing Hub is a centrally managed area of land that is planned, divided, and designated specifically for businesses involved in agro-processing activities and supporting services.
These hubs are strategically located near agricultural production areas to maximise efficiency. They provide essential infrastructure, logistics, and specialised services needed for agro-industrial operations, such as electricity, water supply, cold storage, laboratory testing, business services, ICT support, and waste management.
The hub is owned and managed by a dedicated, independent organisation, typically through a public-private partnership.
Without these the peri-urban and rural areas are isolated and poverty-ridden. We expect these configurations to result in hundreds of thousands of direct and indirect jobs, raise living standards of farmers from subsistence to minimum of $2/day to $10-20/day thereby raising consumer spending that translates to rising GDP.
QUE: Considering possible changes in government at both federal and state levels, what measures are being put in place to ensure the sustainability and continuity of the SAPZ project?
This is an important question. The Nigerian economic landscape is littered with abandoned projects. White Elephants. We are aware as I enumerated in my 2016 book, “From Consumption to Production: The whys and ways out of failed industrialization in Nigeria”.
One of the most important steps I took was to carry out a study on why Zone projects succeed or fail. In general, we found underwhelming performance of zones in Nigeria which is consistent with poor performance of the manufacturing sector broadly.
The underlying factors of course relate to change in government. There is considerable uncertainty that attends change of government. It introduces inherent unpredictability that is characteristic of complex systems like the SAPZ.
One thing we are clear about is that we can forecast the future where governments run a business. It’s riddled with rent-seeking rather than profit-seeking. Enterprises end as White Elephants.
We therefore designed the SAPZ as “government enabled, private sector-driven”. This means that both ownership and management will be predominantly private rather than public. We believe this to be the way to sustainability. Additionally, we hope to get an SAPZ Bill enacted to regulate and sustain this model.
QUE: How does the SAPZ initiative intend to support smallholder farmers and agribusinesses within the zone?
The SAPZ approach is designed to ensure inclusivity, and has put in place incentives, policies, and different financing products targeted at the small farmers. One of our key partners, the International Fund for Agricultural Development (IFAD) is an international financial institution and a specialized agency of the United Nations that works to address poverty and hunger in rural areas targeting smallholders.
The SAPZ will empower small holder farmers by providing required inputs technology, knowledge and organizing supply chains to improve productivity for small farmers.
We also hope to build the capacity and skills of small producers by using organized commodity associations which include public and private entities, offtakers, farmers as a mechanism for upscaling technologies. The SAPZ holds massive potential for raising living standards of smallholder farmers.
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QUE: What role does AfDB play specifically in the design, funding, and implementation of the SAPZ in Nigeria?
The African Development Bank (AfDB) is the creator and custodian of the SAPZ model. The Bank is widely recognised for its convening power, a strength that has intensified under Dr Adesina’s leadership.
Our SAPZ partnership with the Government of Nigeria was cemented in December 2019 during a high-level meeting in Abuja, chaired by the Former Minister of Finance, Budget and National Planning. The meeting was attended by three other ministers, namely ministers of Industry, Trade and Investment, Agriculture and Water Resources and key partners, this meeting set the stage for the SAPZ programme’s momentum.
The AfDB has put together a strong partnership that raised five hundred and forty million dollars ($540 million) for phase 1 and the Bank drove phase 2 also. On the latter, we have got a commitment from partners of over two billion dollars ($2.2 billion).
This happened in September 2024 when we convened a well-attended two-day Inception Workshop for phase Two of Nigerian SAPZ at the Africa Investment Forum 2025 in Rabat, Morocco. Supported by Dr Adesina, I presented the SAPZ concept to a room full of investors and stakeholders. What followed was extraordinary: five Nigerian Governors and Commissioners from other States, eager to participate in the programme, showcased their SAPZ projects. In just two hours, we recorded this massive investment commitments for Nigerian SAPZs.
QUE: What advice do you have for the government and Nigerians regarding the SAPZ initiative?
The Federal Government of Nigeria right from the Presidency, ministers and parastatals have been very supportive. I must thank the Vice-President in a special way for his unwavering support and championing of the program. The Ministers of Finance, Agriculture, Industry have been totally behind the program. Naturally, it is inevitable to find individuals with different agendas, but we do understand that. The Government has designated the SAPZ a Presidential Priority Program (PPP). Additionally, I would like to suggest that Government grants every SAPZ site, an export status.
