Alliance for Special Agro-Industrial Processing Zones commits $3b to boost agriculture and food production
In order to close the crucial financing gap in agriculture, the African Development Bank Group (www.AfDB.org), Afreximbank, Arise Integrated Industrial Platforms, the Islamic Development Bank Group, and the United Nations Industrial Development Organization announced the formation of a new private sector-focused Alliance at the 2023 Africa Investment Forum Market Days.
African rural areas that lack development will become prosperous agro-industrial corridors thanks to a $3 billion investment announced by founding members of a new alliance focused on the private sector called the Special Agro-Industrial Processing Zones (SAPZ).
The business sector, development finance institutions, and development-focused technical partners who make up the Alliance will also aid in streamlining the planning and execution of SAPZ projects.
Afreximbank contributed $1 billion, the Islamic Development Bank Group (IsDB) contributed $300 million, the African Development Bank Group committed $1.1 billion, and Arise Integrated Industrial Platforms (Arise IIP) and its partners contributed $600 million.
“The Alliance will raise funds through various investment windows for project preparation, project development and construction, and financing for tenant companies,” stated Dr. Akinwumi A. Adesina, President of the African Development Bank Group.
“By doing this, the Alliance will mobilize resources towards our shared goal of enhancing agricultural value addition in Africa, complement current initiatives, and bridge the critical financing gap,” Adesina continued.
The Alliance was introduced on Wednesday during the continent’s top investment marketplace, the 2023 Africa Investment Forum Market Days, in Marrakech, Morocco. The founding members talked about how the SAPZ model might affect Africa’s agro-industrialization process during the launch session.
“This is just the beginning; others will join us,” stated Dr. Beth Dunford, Vice President for Agriculture, Human, and Social Development at the African Development Bank. “The beauty of this Alliance is that it brings together a lot of different, diverse players.”
Through the zone’s ecology, Special Agro-Industrial Processing Zones connect rural and urban development, promoting structural transformation in agriculture. These zones connect smallholder farmers to agro-industrial processors and consumer markets by integrating them into value chains via infrastructure and logistics.
Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, praised the formation of the Alliance and recommended that the establishment of respectable continental regulatory authorities be taken into consideration in order to draw in the private sector. “These kinds of projects are highly visible,” he clarified.
The Alliance members claim that achieving this funding target will result in the delivery of an extra 15 to 20 SAPZ projects in different nations throughout the continent as well as better administrative, policy, and investment incentives.
In the words of IsDB President Dr. Muhammad Al Jasser, “Financing alone has never been enough to develop,” stated Eng. Hani Sonbol, CEO of the International Islamic Trade Finance Corporation and interim CEO of the Islamic Corporation for the Development of the Private Sector. “A new way of thinking about investment is needed if we are to strengthen food sovereignty in Africa. We search for ways to engage the private sector, adapt to climate change, and achieve self-sufficiency,” he stated.
Gagan Gupta, CEO of Arise IIP, emphasized the importance of building infrastructure—such as housing, transportation, health care, and extension services—around the zones to meet the needs of these communities. He stated, “Policy frameworks, supporting infrastructure, and training and vocational centers are provided by the governments to these zones.”
As part of the Alliance, the United Nations Industrial Development Organization (UNIDO) contributes a plethora of technical support knowledge, real-world experience, tools, and techniques.
UNIDO Managing Director of the Directorate for Sustainable Development Goals, Innovation and Economic Transformation Gunther Beger remarked, “We have a lot of experience in developing, planning and implementing industrial parks and special economic zones.” The Alliance offers an entirely fresh strategy to revamp Africa’s agro-food sector. The cooperation of financial institutions and other public and private sector stakeholders is greatly needed, he continued.
The African Development Bank has already invested $853 million to the development of over twenty Special Agro-Industrial Processing Zones in eleven different countries throughout the continent. Bank partners have contributed $661 million in cofinancing for this project.
Senior Special Advisor to Dr. Adesina, Professor Oyebanji Oyelaran-Oyeyinka, concluded, saying that SAPZ is a mechanism intended to accomplish the dual goals of structural reform and rural development through agro-industrialization.
Large private sector businesses were urged to become SAPZ tenants by Mr. Ryad Mezzour, Minister of Industry and Trade for the Kingdom of Morocco, prior to the panel discussion. “You require a business that can integrate this area and bring the others.”
“Special Agro-Industrial Processing Zones will give us a chance to mass produce the food we need to feed our population,” stated Richard Tusabe, Rwanda’s minister of state for finance. Our people must be fed; there is no short cut.
African heads of state, investors, transaction sponsors, and development finance institutions are drawn to the Africa Investment Forum. The Forum also has boardroom sessions that show investors billions of dollars in deals in transportation, energy, and agribusiness, among other important areas. Go to www.AfricaInvestmentForum.com/en to find out more about the Africa Investment Forum.
