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Beyond Oil: Transforming the Nigerian Agricultural Sector

In Africa, agricultural holdings are generally small and scattered; farming is often of the subsistence variety, characterized by simple tools and shifting cultivation.

Despite the intense concentration on manufacturing, mining and oil sectors, it is understood by many Nigerians that agriculture remains one of the forces contributing to the surging growth of Nigeria’s economy since country’s independence.

The Economic Impacts

The sector has remained the main sector of the Nigerian economy despite the discovery of oil in commercial quantities and its attendant boom since 1970s. A significant portion of the agricultural sector in Nigeria involves cattle herding, fishing, poultry, and lumbering, which contributed more than 2 percent to the GDP in the 1980s.

Nigeria is one of the largest countries in Africa, with a total geographical area of 923,768 square. The country has not been left out in the wake of this as there has been an increased focus on non-oil sectors of the Nigerian economy one of which is agriculture and agribusiness.

Over the past 20 years, value-added per capita in agriculture has risen by less than 1 percent annually. It is estimated that Nigeria has lost USD 10 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone due to a continuous decline in the production of those commodities.

Nigeria’s capital importation into the agricultural sector is gaining momentum as foreign investments into the sector rose by 82 percent from $159 million (N57 billion) in 2017 to $289 million (N104 billion) in 2018, data from the National Bureau of Statistics (NBS) shows [Chart above].

The country’s over dependence on the oil sector has brought negligence to the Agricultural sector that once contributed immensely to the nation’s GDP. In 2018, agriculture contributed around 21.2 percent to Nigeria’s GDP, 25.75 percent came from industry, and 52.01 percent of the services sector [Chart above].

While the Nigerian Gross Domestic Product Report  by the Nigerian Bureau of statistics (NBS)  indicate that the sector grew by 2.28% (year-on-year) in the third quarter of 2019, an increase by 0.37% points from the corresponding period of 2018, and 0.49% points from the preceding quarter which recorded a growth rate of 1.79% [Chart above].

The GDP from agriculture in Nigeria averaged is 3904516.85 Million Naira from 2010 until 2019, reaching an all time high of 5408978.92 Million Naira in the third quarter of 2019 and a record low of 2594759.86 Million Naira in the first quarter of 2010, according to Trading Economics [Chart above].


However, the country that is highly endowed with material and human resources, agricultural growth remains below potential due to continued insurgency in the Northeast and ongoing farmer-herdsmen conflicts. The instability in the North has also resulted in the displacement of people, which has contributed to the high incidence of poverty in the North East.

Although, agriculture still remains the largest sector of the Nigerian economy, which employs two-thirds of the entire labour force, the production hurdles significantly stifled the performance of the sector.

The agricultural sector suffers from extremely low productivity, reflecting reliance on antiquated methods. Agriculture has failed to keep pace with Nigeria’s rapid population growth, so that the country, which once exported food, now imports a significant amount of food to sustain itself.

Agriculture Contributions to Nigerian Economy 2010 – 2019 (3Q) – Data

Strategic Thoughts

Higher agricultural productivity is vital for economic growth, especially in Africa, because of strong growth linkages and comparative advantages in trade. It can also deliver a triple dividend; sustained food security, higher human development and lower pressure on land and water.

In order to develop the Nigerian Agricultural sector investment should be focused on developing new products, tools, technologies, systems, and approaches to advance inclusive agricultural transformation.

The Nigerian economic system should support the country agricultural strategies and help drive systems innovation through the private sector, and other in-country partnerships to enable more effective delivery of products, tools, technologies, and services.

Nevertheless, the public and private sector platforms should provide multiple services to farmers in Nigeria, like self-help groups in India or producer collectives in other African countries.

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