WorldStage Nigeria’s Macroeconomic Outlook 2026– Demand and Trade Dynamics: Nigeria’s agriculture sector is poised to benefit from the World Bank’s $500m loan to boost agricultural productivity, strengthen value chains, and create jobs.
The growth driver will be government initiatives and investments in infrastructure, technology, and mechanization.
The sector has always played a vital role in the economy, being a major employer and a key contributor to food security, and a driver of non-oil growth.
It witnessed some reforms in 2025, including improved foreign exchange stability, moderating inflation, and government interventions.
Specifically, in Q3 2025, the sector grew by 3.79%, an improvement from prior periods, supported by non-oil sector momentum. It contributed around 31.21% to real GDP (with crop production as the dominant sub-sector at about 66% of agricultural output). Overall, agriculture accounted for roughly 26-31% in various reports.
Government priorities including infrastructure investments (roads, rails) for agro-industrialization, programs to ramp up production (e.g., yam yields), and focus on value chains, mechanization, and climate-smart practices.
Longer-term views suggest sustained expansion, with the sector’s market size potentially starting around USD 100 billion in 2026 and growing at a 6% CAGR through 2035 if productivity and market access improve.
Overall, agriculture is positioned as a key pillar for inclusive, non-oil-led growth in 2026, with potential to moderate food prices and support employment if structural reforms accelerate.
The sector’s performance will be crucial to achieving broader goals like reducing poverty and enhancing food security in the country.
In 2025, Nigeria saw notable gains in crop output. Key staples showed increased production compared to 2024 levels, supported by expanded cultivated areas, improved farming practices, favorable rainfall in many regions, technology adoption, and government interventions (e.g., dry-season farming initiatives). This contributed to reduced food prices nationwide, easing household access and moderating inflation pressures.
Major crops with reported increases
Cassava- Remained one of the largest outputs globally, with estimates around 60-62 million metric tons (MT) in recent assessments.
Yam- Nigeria as the world’s top producer, with annual output historically in the 60+ million MT range.
Maize- Strong harvest led to higher yields and a 33% price drop in some periods.
Rice-Gains in national output, though still supplemented by imports.
Other staples (sorghum, millet, cowpea) will likely continue modest expansion, supported by climate-smart practices and mechanization pushes.
Government reforms
Nigeria’s crop production forms the backbone of its agriculture sector, with staples like cassava, yam, maize, rice, sorghum, millet, and cowpea dominating output.
Crop production typically accounts for about 66% of total agricultural GDP, driven primarily by smallholder farmers.
The Federal Government’s Renewed Hope Agricultural Mechanisation Programme (GHAPP) is one of Africa’s largest mechanization drives. It targets over 1.2 million farmers annually and covering over 1.5 million hectares to modernize smallholder farming, boost yields, and enhance productivity.
National Agricultural Technology and Innovation Policy (NATIP) has also been put in place to modernize the sector, while Anchor Borrowers’ Program is to provide financial support to smallholder farmers.
Vice President Kashim Shettima at the World Economic Forum in Davos (January 2026) outlined Nigeria’s macro-strategy, anchored on three main pillars- Increased food production- through targeted programs to expand output of staples; Environmental sustainability- incorporating climate-smart practices and resource management; and deeper regional integration- within West Africa for trade, stability, and shared food systems.
A flagship initiative is the “Back to the Farm” program, designed to restore productivity in key food basket regions, reduce FX spending on imports, and insulate the economy from external vulnerabilities.
Other major policies and programs include ongoing review of National Policy on Food and Nutrition. It is being reviewed to produce a new 10-year blueprint (2026–2035). This consultative process, led by the Federal Ministry of Budget and Economic Planning, aims to address malnutrition in all forms, promote healthy diets, and align interventions across sectors like health, agriculture, social protection, and water/sanitation. It incorporates gender- and climate-smart elements to combat undernutrition while preventing obesity and diet-related diseases.
There is also the National Agricultural Technology and Innovation Policy (NATIP) 2022–2027. This remains the guiding framework for agricultural transformation, focusing on technology adoption, innovation, mechanization, private-sector involvement, and value chain development to achieve food security, job creation, and reduced imports.
Crop-Specific Initiatives – This include the Ramping Up Programme for yam (aiming to triple yields from 10 MT/ha to 30 MT/ha by 2027, expand cultivated land, and cut post-harvest losses from 40% to 25%).
Similar efforts target staples like rice, maize, cassava, and soyabean expansion.
Zero-Duty Import Policy – A temporary waivers on duties for key food items to address shortages and price pressures while domestic production ramps up.
Support Mechanisms- Expanded funding via institutions like the Bank of Agriculture (BOA) for staple crop farmers, interest-free loans, improved access to finance/insurance, and partnerships (e.g., with FAO for irrigation, Lake Chad recharge, and resilience building).
Humanitarian and Resilience Focus- In conflict-affected areas (e.g., northeast), the government collaborates with UN agencies like WFP and FAO on cash transfers, food assistance, school feeding, and shock-responsive safety nets. FAO’s Emergency and Resilience Plan 2026–2028 targets reaching millions through emergency agriculture, value chains, and data systems.
Programs like the National Programme for Food Security (NPFS) and NG-CARES continue to support smallholders, rural income, and sustainable practices.
Challenges
Success in 2026 hinges on addressing insecurity, input costs, infrastructure gaps, and effective budget implementation. There is the projections of 14–15 million needing assistance through mid-2026 in northern regions due to conflict, below-average harvests, and displacement.
Persistent issues like insecurity in farming regions (e.g., banditry, insurgencies in the North), inadequate storage/infrastructure, limited access to credit (agriculture receives only 5% of bank lending), and climate vulnerabilities could cap gains.
There is also the potential of farmer scale-back due to 2025 oversupply/low prices (especially maize/rice), leading to reduced planting and future shortages.
Opportunities
Increased investment in irrigation and water-efficient technologies to mitigate climate risks will no doubt boost opportunity in the sector.Others are adoption of precision agriculture technologies, such as GPS mapping and drones, to improve productivity; expansion of agro-processing and value-added opportunities; and growing interest in organic farming and sustainable practices.
*Extract from WorldStage Nigeria’s Macroeconomic Outlook 2026.
