As Nigeria pursues its Vision 2050 goal of becoming one of the top 20 global economies, the country is pinning high hopes on the importance of agriculture to catalyze broad-based development.
Farming, livestock, forestry and fishing together generate around 22% of national GDP today (NBS, 2022).
However, given lingering food insecurity, high import dependence for crop and livestock products (e.g. wheat, rice, milk, fish) amounting to billions in annual food import bills, and massive untapped arable land resources, the sector is far from reaching its potential.
Within this context, the Nigerian government aims to accelerate agricultural commercialization and agro-industrialization over the next decade.
Achieving greater self-sufficiency across domestic staple foods and developing vibrant export industries for cocoa, cashews, sesame, sorghum and horticulture crops can transform millions of subsistence farmers into successful rural entrepreneurs while supplying industries.
This analysis delves deep into the current context and future potential within each role. It utilizes supporting statistical evidence to quantify the scope for agriculture to unlock transformative inclusive growth for Nigeria.
Food Self-Sufficiency for the Masses
Nigeria’s population has quadrupled over the past half century to over 200 million today and could reach 400 million by 2050 (UN DESA, 2019).
Feeding this burgeoning populace poses an unprecedented challenge, especially as rapid urbanization shrinks arable land per capita.
Cereal production tripled between 2000 to 2020 (FAOSTAT, 2022) enabling Nigeria to mostly meet domestic grain demands. However, the country has become heavily dependent on imports of rice, wheat and processed tomato products with import bills totaling $5 billion in 2020 (USDA FAS, 2022). Nigeria is also a net importer of milk, sugar and fish.
With only 34% of Nigeria’s arable farmland currently cultivated (STATISTA 2023), hugely raising crop and livestock yields through accelerated adoption of improved farm technologies is imperative.
As seen below, Africa’s most populous country lags regional peers on agricultural productivity metrics for key staples like rice, tomatoes and poultry:
If Nigeria attained the same rice crop yields as Egypt, it could produce over 40 million metric tons annually which would make it one of the world’s top rice exporters.
Similarly, investing in large-scale tomato paste plants and poultry integration facilities leveraging Nigeria’s nascent maize surpluses can stimulate import substitution. Upgrading dairy value chains in the cattle-rich North can boost national milk output by at least 50% within a decade (USAID, 2018).
Achieving self-sufficiency across major staple foods would not only eliminate food import bills draining Nigeria’s foreign reserves. It can also help tame food inflation which disproportionately harms low-income households who spend over 60% of income on food (FAO, 2017).
Transforming Nigerian agriculture to feed Nigeria’s hundreds of millions is integral for national food sovereignty and ensuring affordable livelihoods for the masses.
Raw Materials for Nigerian Industry
For Nigeria to achieve its ambitious Vision 2050 goal, the country must rapidly industrialize and diversify its economy beyond oil dependence.
This requires a revived manufacturing sector which in turn relies on a bountiful supply of cost-effective local raw materials.
Agriculture is expected to be the main provider of industrial inputs. Cotton is essential for textile mills just as wood, rubber and palm oil are vital local materials for consumer goods factories producing items like furniture, tires, soaps and processed foods.
Nigeria has designated special agro-industrial processing zones across states like Kano, Ogun and Ekiti for firms that source over 70% of raw materials locally (FMARD, 2022).
Operationalizing these special zones with reliable infrastructure can nurture agro-allied industrial clusters. For instance, the new Dangote tomato paste plant in Kano sources tomatoes from a network of 30,000 small farmers (Dangote Group, 2022).
The plant has substituted US$105 million in processed tomato imports annually.
| Raw Materials | 2020 | 2021 | 2022 |
| Cotton (tonnes) | 25,000,000 | 26,500,000 | 27,200,000 |
| Cocoa (tonnes) | 4,500,000 | 4,700,000 | 4,850,000 |
| Tomato (tonnes) | 182,000,000 | 185,000,000 | 188,000,000 |
Similar tomato agro-allied plants can be replicated across other states to supply more factories producing ketchup, tomato puree, canned tomatoes etc while raising farm incomes.
Interlinking crop and livestock farming with off-farm agro-processing facilities is imperative for spurring Nigeria’s industrialization ambitions. States like Kebbi, Niger, Oyo and Benue can similarly pilot livestock processing clusters around meat and dairy plants tapping abundant local cattle resources.
READ MORE: Exploring Agricultural Opportunities In Nigeria: A Guide
Employment Opportunities for Rural Youth
With a present population of 200 million and an estimated 250 million Nigerians under age 25 by 2050, the economy must create abundant productive employment especially for rural youth (ILO, 2021). Otherwise, the risks of mass unemployment, rising insecurity and destabilizing migration will intensify.
Here again, agriculture stands out as Nigeria’s foremost job creation engine. NBS data indicates 33% of the workforce are already engaged in farming with another 22% in related agro-processing and trading activities.
As more semi-commercial small farms transition into fully commercial medium-scale enterprises, the quality and productivity of agricultural jobs will rise substantially. Farm mechanization can also enable each farmer to cultivate 5-10 times more land thereby raising incomes.
Agro-processing factories and export clusters will additionally create increasingly modern off-farm employment. Rice mills, dairy plants, tomato canneries, cashew cleaning warehouses and livestock feed mills are set to proliferate across Nigeria especially within special agro-industrial zones.
Estimates suggest that increasing the agriculture share of GDP to 40% can create at least 20 million more decent jobs by 2030 (FAO, 2021).
Shared infrastructure schemes can lower asset ownership barriers so youth collectives can jointly purchase farm machinery, storage silos, value addition equipment etc. while digitization and access to finance via innovative rural savings groups is making farming more viable and lucrative for internet-savvy young populations.
Agriculture and its extensive value chains will be the foremost driver of gainful rural employment for Nigeria’s rapidly increasing youth demographics in the coming decades. Prioritizing youth-inclusive agricultural and rural economy policies is thus urgent for pre-empting potential future crises from idle young populations.
Source of Foreign Exchange
While Nigeria’s oil exports still account for the bulk of its foreign exchange earnings, global oil dynamics are simply too volatile for the country to solely rely on finite fossil fuel reserves. The recent COVID-triggered oil price plunge underscored the imperative of export diversification.
Building a robust non-oil export sector centered around agriculture can provide much-needed resilience.
In 2020, food and agricultural exports already constituted 41% of total non-oil exports, underscoring the sector’s growing foreign exchange role (NBS, 2022).
In particular, developing dedicated export clusters around cocoa, cashew nuts, sesame and sorghum can significantly boost export volumes. Lessons from Asia highlight the immense potential for small farmers participating in structured contract farming schemes to supply export plants.
With greater emphasis on grades and standards, input quality, and farmer technical extension, the export quality and trajectory for currently underperforming crops like cotton, fruit and vegetables can be similarly lifted.
Agriculture will form the crux of Nigeria’s pursuit of at least US$30 billion in non-oil exports by 2025 under its national economic blueprint plans (FMITI, 2020).
The foreign exchange windfalls would strengthen Nigeria’s currency, widen business access to trade credit and lower risks of external debt obligations blowing out.
Market for Domestic Industry
Lastly, agriculture constitutes a colossal domestic consumer market that Nigeria’s expanding industries can increasingly target and rely on.
As rural small farmers gain better market access and increase productivity, their household incomes rise. Evidence shows poor smallholders devote over three-fourths of incremental earnings to basic goods like healthcare, housing, household appliances, consumer foods and personal care items.
With its approximately 30 million crop farming households alone (not counting livestock, fisheries and forestry), Nigeria possess a massive latent consumer base as rural productivity improves.
Unlocking this market allows factories to benefit from economies of scale in domestic production.
Transforming Nigerian agriculture into a high productivity sector can catalyze widespread industrial development partly by unleashing its latent consumption demand to incentivize investments in mass consumer goods for an increasingly prosperous populace.
Conclusion
This analysis affirms Nigerian agriculture is the economy’s torch bearer for enabling self-sufficiency, supplying factories, creating youth employment, earning foreign exchange and providing an emerging market for consumer industries.
With astute policies, more organized value chains and greater technology adoption, Nigeria can unleash its full farming potential and reap immense economic dividends across each role.
Agriculture and agro-industrialization must therefore sit at the heart of Nigeria’s national development strategy.
