Our Correspondent | Agriculture
Nigeria’s agricultural sector recorded one of its strongest quarterly performances in recent years in the third quarter of 2025 – development stakeholders have linked it to rising investor confidence, improved harvests and expanding agro-processing activities.
Official data show the sector contributed ₦30.5tn to nominal Gross Domestic Product (GDP) in Q3, reinforcing agriculture’s status as the backbone of the economy even as stakeholders warn that the gains remain fragile without policy execution.
Figures from the National Bureau of Statistics (NBS) indicate that agriculture grew by 3.79 per cent year-on-year in real terms in Q3 2025, outperforming the 2.55 per cent growth recorded in the same period of 2024 and the 2.82 per cent posted in the second quarter of 2025. On a quarter-on-quarter basis, real growth stood at 32.87 per cent, reflecting a sharp seasonal and activity-driven rebound.
Crop production remained the main driver of performance, accounting for ₦20.13tn or nearly 66 per cent of the sector’s total output. Livestock contributed ₦7.8tn, while forestry and fishing added ₦1.63tn and ₦943.77bn respectively. In comparison, agriculture generated ₦29.56tn in Q3 2024 and ₦21.19tn in Q2 2025, underscoring a notable acceleration in activity across subsectors.
In real terms, agriculture accounted for 31.21 per cent of aggregate GDP in Q3 2025—slightly below the 31.27 per cent recorded a year earlier but significantly higher than the 26.17 per cent contribution in Q2 2025. Nominal contribution stood at 26.85 per cent, down from 30.74 per cent in Q3 2024 but well above the 21.04 per cent recorded in the preceding quarter.
Confidence-Driven Growth, Fragile Fundamentals
Industry stakeholders attribute the improved performance largely to renewed investor interest in agriculture, spurred by increased government attention, policy signalling and expanding private-sector participation. However, they caution that unless announced reforms are fully implemented, the momentum may weaken in subsequent quarters.
President of the All Farmers Association of Nigeria (AFAN), Mohammed Magaji, linked the Q3 growth partly to targeted government interventions under the National Agricultural Growth Scheme–Agro-Pocket Programme, supported by the African Development Bank. According to him, the supply of agro-inputs under the scheme supported production, while favourable seasonal factors boosted output.
“Q3 coincides with the peak of dry-season harvests and the onset of rainy-season cropping harvests. That is why food prices often ease between August and December,” Magaji told The Punch, adding that adequate rainfall across much of the country improved yields.
Yet he warned that the apparent growth masked deep structural challenges for farmers. Despite higher output, many producers sold at prices below production costs due to high input prices, weak market structures and competition from imported food.
“The growth came at the expense of farmers. Food prices cannot be falling when input costs remain very high—that is not sustainable,” he said, calling for fairer pricing mechanisms and reduced production costs.
Magaji argued that frequent resort to food imports to moderate prices has created a buyer-dominated market that undermines domestic production. To stabilise prices and protect farmers, he urged the introduction of a Buyer of Last Resort scheme for strategic crops such as maize, rice, soybeans and sorghum.
Agro-Processing and Private Investment Gain Momentum
The Chairman of the Lagos Chamber of Commerce and Industry (LCCI) Agriculture and Allied Group, Tunde Banjoko, said the sector’s performance reflects growing investor confidence driven by policy posture rather than policy execution.
“There seems to be a willingness by government to engage investors. Even though many policies are yet to be implemented, that signal alone is giving investors confidence,” he told The Punch.
Banjoko noted that Nigeria’s push to diversify away from oil has redirected capital towards agriculture, particularly agro-processing, where indigenous firms have been scaling up operations. Expansion by major players such as Okomu Oil, Presco, PZ Wilmar and Leventis, he said, has strengthened value chains and stimulated upstream production to meet raw material demand.
“Everybody seems to want a stake in agriculture now more than ever,” he said, adding that sustained investment in processing would eventually influence commodity pricing and supply stability.
Financing Gaps and Policy Execution Concerns
Despite the improved outlook, stakeholders stress that financing constraints remain a major risk to sustainability. Banjoko pointed to the yet-to-be-executed recapitalisation of the Bank of Agriculture (BOA), which the Federal Government announced earlier in the year.
President Bola Tinubu had approved a ₦1.5tn recapitalisation of the BOA—described as the most significant boost to agricultural finance in Nigeria’s history—but industry operators say tangible execution has not followed.
“One thing is to announce policies to excite investors; another is to execute them,” Banjoko said. “As we speak, the Bank of Agriculture has not been recapitalised.”
He argued that the BOA remains critical to funding large-scale and smallholder production, as commercial banks continue to show limited appetite for agricultural risk. Without affordable and long-term financing, he warned, processors may struggle to source sufficient raw materials locally.
Stakeholders also raised concerns about multiple taxation on agricultural produce, high fuel costs and logistics bottlenecks, which continue to erode margins. Calls intensified for streamlined taxes, better transport infrastructure and support for local refining to reduce logistics costs.
AfCFTA and Long-term Prospects
President of the Nigeria Agribusiness Group, Kabir Ibrahim, linked the Q3 performance to growing investor awareness of agribusiness sustainability and regional market opportunities under the African Continental Free Trade Area (AfCFTA).
“With vast arable land, a large population and access to a continental market, agribusiness offers long-term prospects,” he said, adding that Nigeria’s commitment to the Kampala Comprehensive Africa Agriculture Development Programme (CAADP) Declaration 2026–2035 has further boosted optimism.
He noted that new investment windows—targeting value chains such as dairy, cassava, cocoa, maize, rice and tomato—are beginning to reflect in sectoral output.
Ahead
While Q3 2025 data underline agriculture’s resilience and renewed investor confidence, stakeholders agree that sustaining growth will depend on decisive policy execution. Key priorities include recapitalising the Bank of Agriculture, introducing price stabilisation mechanisms, lowering input and logistics costs, and deepening private-sector partnerships.
Without these, analysts warn that strong quarterly numbers may prove short-lived, even as agriculture remains central to Nigeria’s food security, employment and economic diversification ambitions.