• Thursday, February 29, 2024
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AfDB backs Ekiti’s digital innovation hub with $80m loan

Nigeria to see slowest growth in West Africa this year – AfDB

The African Development Bank Group (AfDB), a multilateral development finance institution, has approved an $80 million loan to finance the Ekiti Knowledge Zone project in Nigeria.

“The Ekiti Knowledge Zone Project design responds to the requirements of technology firms and prospective investors as indicated during the preparation phase, lessons learnt from similar Bank-financed projects such as the Cabo Verde and Senegal technology parks, and drew insights from good practices of similar initiatives in the continent and globally,” Lamin Barrow, director general of the Nigeria Country Department at AfDB, said.

The Ekiti Knowledge Zone is a federal government-backed and state-led special economic zone with fiscal incentives to attract private sector investment in the digital technology and knowledge economy value chains, according to a statement.

The AfDB said the special economic zone seeks to promote digital innovation and entrepreneurship, generate 26,000 jobs, and contribute some $14 million annually in net economic benefits.

It said the project will attract technology firms and investors, including anchor investors from the private sector, to form part of a special purpose vehicle that allows multiple investors to pool financing, adding that this structure will enable investors to manage the operations of the zone.

“The project also aims to attract businesses, including tech start-ups, business process outsourcing firms, fabrication and production companies, research institutes, and corporate back-office operations, to locate in the zone,” it said.

The Ekiti Knowledge Zone was conferred “a free zone” status by the Federal Government under the Nigeria Export Processing Zones Authority Act in April 2023. It will thus offer various incentives for private investors, including free repatriation of capital, profits and dividends by foreign investors, rent-free land during the construction phase, tax holidays, waivers on import and export duties, and expatriate quotas for companies operating in the zone, according to the statement.

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The total project cost is estimated at $94.8 million, with the Ekiti State government providing $14.8 million in counterpart funding.

The AfDB’s financing will leverage other development partners’ programmes in the state, the statement said.

It said the bank’s financing will support the development of world-class infrastructure, including a 20-hectare green technology park and such services infrastructure as roads, electricity, water supply and wastewater treatment facilities. The project will provide information and communication technology training to youth, nurture innovation and enhance entrepreneurial skills.

The statement said: “The project also advances government-enabling policies and establishment of the Ekiti State Innovation Fund to provide pre-seed and early growth stage funding to promote entrepreneurship, innovation, and investment. The Fund is expected to mobilize investments into more than 50 seed and early growth start-ups.

“The Ekiti Knowledge Zone targets more than 19,000 youth and seeks to attract investment commitments from at least fifteen firms with the potential to generate revenues of about $10.8 million.”

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The AfDB’s active portfolio in Nigeria comprises 48 operations valued at $4.4 billion, including 24 public sector projects amounting to $2.5 billion and 24 private sector operations valued at $1.9 billion, according to the statement.