How Nigeria’s Farming Sector Can Be Key To Economic Stability

Nigeria’s economic landscape is a complex and evolving needlepoint, influenced by various sectors that drive growth and stability. Among these, agriculture and manufacturing stand out as pillars of resilience and productivity.

Nigeria, a nation endowed with over 34 million hectares of arable land for farming and favorable climatic conditions, has long been regarded as a potential agricultural powerhouse in Africa. Yet, despite its vast resources, the country remains heavily reliant on food imports, spending billions annually to meet domestic demand.

Food inflation has soared to 39.84 percent in December of 2024, exacerbating poverty and undermining economic stability. This raises critical questions: Why has Nigeria failed to achieve food security, and how can its farming sector be revitalised to stabilise the economy and reduce import dependency?

The Root Causes of Food Inflation and Agricultural Decline

Nigeria’s agricultural sector, which once contributed over 60% to the nation’s GDP in the 1960s, has seen a steady decline due to a combination of factors. Today, agriculture accounts for about 23% of GDP, yet it remains the largest employer of labour, engaging nearly 70% of the population. The sector’s underperformance is a key driver of food inflation, which stood at 39.84% in December, 2025, according to the National Bureau of Statistics (NBS).

Insecurity and Farmer-Herder Conflicts: In recent years, insecurity, particularly in the northern regions, has disrupted farming activities. Boko Haram insurgency, banditry, and farmer-herder clashes have forced many farmers to abandon their fields. The Global Terrorism Index 2022 ranked Nigeria as the eighth most impacted country by terrorism, with agricultural communities bearing the brunt.

Poor Infrastructure and Storage Facilities: Nigeria’s agricultural value chain is plagued by inadequate infrastructure. Poor road networks, lack of storage facilities, and inefficient distribution systems lead to post-harvest losses estimated at 40-50% for perishable goods. The absence of modern silos and cold storage facilities means that even when farmers produce surplus, much of it goes to waste.

Over-Reliance on Oil Revenue: Since the discovery of oil in the 1950s, Nigeria’s economy has become heavily dependent on crude oil exports, neglecting agriculture. Oil revenues account for over 90% of foreign exchange earnings, leaving the economy vulnerable to global oil price fluctuations. This mono-economy model has stifled investment in agriculture and other non-oil sectors.

Limited Access to Credit and Modern Technology: Smallholder farmers, who produce about 80% of Nigeria’s food, often lack access to affordable credit and modern farming technologies. High-interest rates and stringent collateral requirements make it difficult for farmers to secure loans. Additionally, the adoption of mechanized farming, improved seeds, and irrigation systems remains low, limiting productivity.

Ineffective Government Policies: While the Nigerian government has launched several agricultural initiatives, such as the Anchor Borrowers’ Program (ABP) and the Presidential Fertilizer Initiative, implementation has been marred by corruption, mismanagement, and lack of continuity. These programs often fail to reach the intended beneficiaries, particularly rural farmers.

The Potential of Agriculture to Stabilize the Economy: Despite these challenges, Nigeria’s agricultural sector holds immense potential to drive economic stability. With a population of over 220 million people, the domestic market for food is enormous. By addressing the root causes of food inflation and investing in agriculture, Nigeria can reduce its reliance on imports, create jobs, and boost economic growth.

Reducing Import Dependency: In Q1 2024, total capital importation into Nigeria stood at US$3,376.01 million, including staples like rice, wheat, and fish. By increasing local production, the country can conserve foreign exchange and strengthen the naira. For instance, the closure of land borders in 2019 led to a surge in local rice production, demonstrating the potential for self-sufficiency.

Job Creation and Poverty Alleviation: Agriculture remains the largest employer in Nigeria, particularly in rural areas. Revitalising the sector can create millions of jobs, reduce unemployment, and alleviate poverty. The International Food Policy Research Institute (IFPRI) estimates that every 1% growth in agriculture reduces poverty by 2-3%.

Export Opportunities: Nigeria has the potential to become a major exporter of cash crops such as cocoa, cashew, and sesame. According to data from the National Bureau of Statistics (NBS), in 2024, Nigeria earned approximately ₦1.46 trillion from cocoa exports, making it the top performing agricultural export crop for the year.  By Improving quality standards and meeting international marke demands, the country can tap into the global Agri−export market.

The Role of Technology and Government Policies

To unlock the full potential of agriculture, Nigeria must embrace technology and implement effective policies.

Adoption of Agritech: Technology can revolutionize farming in Nigeria. Mobile apps like Farmcrowdy and Thrive Agric connect farmers with investors, providing access to funding and markets. Drones, satellite imagery, and precision farming can optimize resource use and increase yields. Additionally, blockchain technology can enhance transparency in the agricultural value chain.

Investment in Infrastructure: The government must prioritize the development of rural infrastructure, including roads, storage facilities, and irrigation systems. Public-private partnerships (PPPs) can mobilize the necessary capital and expertise to build modern agro-processing zones and reduce post-harvest losses.

Policy Reforms and Implementation: The government must address corruption and ensure that agricultural programs reach their intended beneficiaries. Policies should focus on providing affordable credit, subsidizing inputs, and promoting mechanization. The Central Bank of Nigeria’s (CBN) intervention funds for agriculture should be closely monitored to prevent mismanagement.

Capacity Building and Education: Training farmers on modern agricultural practices and financial literacy is crucial. Extension services should be revitalized to provide farmers with the knowledge and tools they need to improve productivity.

Nigeria’s farming sector is not just a means of food production; it is a cornerstone of economic stability. By addressing the root causes of food inflation, embracing technology, and implementing effective policies, Nigeria can transform its agricultural sector into a driver of sustainable growth. The time to act is now. As the global population grows and climate change threatens food security, Nigeria must seize the opportunity to feed its people and the world.

The journey to agricultural revitalisation will not be easy, but with political will, private sector involvement, and the resilience of Nigerian farmers, the nation can achieve food security and economic stability. The future of Nigeria’s economy lies in its soil.