AfDB Raises Concerns Over First Phase of Nigeria’s SAPZ Programme

According to the multilateral lender in its Nigeria – Special Agro-Industrial Processing Zones (SAPZS-I) – IPR December 2024 report, the project, coded P-NG-AAA-002, has an unsatisfactory rating due to issues, including delay and weak capacity.

The programme’s first phase debuted in seven states — Ogun, Oyo, Imo, Cross River, Kano, Kaduna, and Kwara, along with the federal capital territory (FCT).

According to the bank’s latest report, the overall performance of SAPZS-I has been relatively slow since project approval, particularly regarding project disbursement.

“The procurement of supervision consultants for the Design, Build, and Operate (DBO) contractors is currently at the Request for Proposal (RFP) stage for Kaduna State and at the Request for Expression of Interest (REOI) stage for Oyo, Imo, and Cross River States,” the report noted.

“DBO bidding documents have been cleared for four states: Kaduna, Cross River, Oyo, and Ogun. Kaduna has already advertised its DBO.

“All these will result in improved implementation, disbursement, and ratings in 2025.

“However, the overall performance status from the time of project approval to date remains relatively slow, especially with regard to disbursement.”

The lender noted that weak capacity at the state project implementation units (PSIUs) and the national project coordination unit (NPCU) were core issues affecting project implementation.

It, however, identified what the Nigerian government could do better.

“Handholding support to both national coordinating office at the federal level and PSIUs in terms of financial management, procurement processes, environmental and social safeguards, etc., reinforced by regular technical workshops on Bank fiduciary requirements,” the report said.

“The bank has also provided an additional two experienced consultants to backstop and handhold the project staff on the implementation of project activities.”

It lamented that Imo State is yet to commence any activity, warning that it could cancel the loans, adding that Ogun must provide an acceptable service legal agreement (SLA), with both states required to meet a deadline of March 31.

For the project output ratings, the AfDB stated that key findings indicate that the project has suffered from effectiveness delays.

“Although approved on 13 – December – 21, project became effective on 17 – October – 23,” the report noted.

“First disbursements to states could only take place as they fulfill other requirements.

“Four States received their first disbursements by June 2024 (8 – 14 months after project effectiveness).

“The fifth State (Ogun) signed its SLA in October 2024.

“Procurement of major civil works (DBO contractors and supervision consultants) has commenced.

“Therefore, all activities that would contribute to achievement of outputs and outcomes are on track.”

The report added that project activities are progressing towards the commencement of major works execution, which will help the project achieve its intended development objectives.