Institutions, not innovation, are the barrier to Nigeria’s agricultural productivity growth

Editor's note: This article is part of a series of posts reflecting on how the evidence from VoxDevLits applies to specific contexts, and is published in collaboration with the International Economic Association's Women in Leadership in Economics initiative. This is the second of two articles exploring how evidence on Agricultural Technology relates to Nigeria. Read the first article here.

Insurance, risk, and climate adaptation

Uninsured production risk operates as a close complement to credit constraints in suppressing technology adoption. Nigerian smallholders, particularly those in the drought-prone north and the conflict-affected Middle Belt, operate in environments of high rainfall variability, volatile output prices, and the ever-present possibility of catastrophic crop failure (Amolegbe et al. 2026; Amare and Balana 2023). Under these conditions, risk-averse farmers rationally forgo high-yield but high-variance technologies even where expected returns are positive. Karlan et al. (2014) conducted randomised controlled trials among smallholder farmers in northern Ghana and found that index insurance provision led to significantly larger agricultural investment and riskier production choices, while cash grants had comparatively smaller effects – a finding that identifies uninsured risk rather than credit access as the binding constraint. The implication for Nigeria is direct: interventions that address credit constraints without simultaneously addressing the risk environment will deliver smaller adoption effects than the credit-alone evidence would suggest.

A national survey of 1,080 farming households in Nigeria confirms that despite government subsidies covering up to 50% of premiums, agricultural insurance uptake remains severely limited and constrained by awareness deficits, affordability barriers, and trust gaps that operate independently of product design (Madaki, Kaechele, and Bavorova 2023). Research on area-yield index insurance in Nigeria's arid and semi-arid zones finds that access to extension services and economic association membership are the primary social capital factors enabling farmers to consider purchasing insurance, and that long-run welfare gains for vulnerable households could be significant if uptake constraints are addressed (Aina et al. 2024). Evidence from comparable West African contexts supports bundled interventions combining drought-tolerant seed varieties with area-yield index insurance as the most effective approach to the joint agronomic and financial dimensions of climate risk, since either instrument alone leaves part of the underlying vulnerability unaddressed (Boucher and Delpierre 2014; Suri et al. 2024).

The urgency of this agenda is reinforced by the magnitude of productivity losses already attributable to anthropogenic warming. Nigeria is among the most climate-exposed countries globally, and domestic evidence associates rising temperatures with substantial maize yield losses. Research exploiting Nigerian household survey data merged with historical climate records finds that weather shocks significantly distort crop mix choices and food security outcomes, with female plot managers facing disproportionate vulnerability and crop diversification emerging as the most effective household-level adaptive strategy – though its adoption remains constrained by the same structural barriers that limit technology adoption more broadly (Amolegbe et al. 2026; Amare and Balana 2023). For northern Nigeria, where climatic and conflict risks are geographically concentrated (Amare et al. 2025; Adelaja and George 2019), these exposures compound in ways that conventional agricultural development programmes are structurally ill-equipped to address.

Digital advisory services and the extension gap

Agricultural extension services in Nigeria reach fewer than half of all smallholder farmers and are disproportionately concentrated among those already proximate to the adoption frontier. Evidence shows that access to extension services is positively associated with asset ownership, fertiliser use, and credit access (precisely the characteristics of better-connected farmers), while receiving extension support is associated with a reduction in food insecurity and an increase in household assets among those who do access it, with the strongest welfare gains confined to farmers who receive advice specifically on new seed varieties and fertilisers (Aremu and Reynolds 2024). Awotide et al. (2016) further documents that only 36% of rice farmers surveyed in Nigeria report any extension contact, and evidence suggests that there is a correlation between extension contact and technology adoption (Abdoulaye et al. 2014, Hamilton and Hudson 2017). This distributional pattern reflects the structural incentives of public extension systems that make initial contact cheapest among better-connected farmers, precisely those requiring least support. However, the quality of advice delivered matters as much as its frequency.

A growing ecosystem of digital platforms is beginning to reach farmers that public extension has not, providing Nigerian smallholders with on-demand and personalised advisories, including crop management guidance, agronomic and fertiliser recommendations, pest and disease diagnostics, and market price information. Fabregas et al. (2025) and Owusu et al. (2026) note that the adoption of digital agricultural extension is linked to increased productivity. Digital advisory tools generate larger productivity effects when combined with in-person facilitation than when deployed in isolation, and the design of the tools themselves shapes who benefits. Choice experiment evidence from Nigeria's maize belt shows that extension agents are generally willing to adopt digital decision support tools, but that weaker potential adopters (that is, those with lower incomes and fewer productive assets) prefer simpler, more flexible tools with lower technical demands, and that offline capability is a non-negotiable design requirement given rural connectivity conditions (Oyinbo, Chamberlin, and Maertens 2020).

This supply-side design constraint mirrors the demand-side infrastructure barriers identified in the broader evidence base – erratic electricity, poor rural mobile network coverage, low digital literacy, and high device costs – are most acute in the northern zones where food insecurity is most severe, and the extension gap widest. Without deployment strategies that deliberately prioritise underserved communities and design for low-connectivity environments, digital extension tools are more likely to amplify than to correct the distributional bias already embedded in the public extension system.

Market access

The welfare returns to technology adoption depend critically on the prices Nigerian farmers face when selling output and purchasing inputs, and the evidence shows these prices are severely distorted by the high cost of moving goods within the country. Atkin and Donaldson (2015), drawing on Nigeria and Ethiopia, provide rigorous causal documentation that internal trade costs in these countries are four to five times higher than in the US, and that intermediaries capture the majority of surplus from price changes, with their share even higher in distant locations, meaning remote farmers see only a small part of any gains from market integration. The structural consequence of these costs is confirmed by direct tests of market integration in Nigeria's grain markets as spatial price cointegration fails to hold in more than 60% of market pairs for maize, sorghum, and millet, with organised urban markets in Abuja and Lagos being more integrated than remote markets, and northeastern markets subject to the Boko Haram insurgency weakly integrated with the national system (Kassouri and Fofana 2025).

Georeferenced data on fertiliser transaction prices across sub-Saharan Africa confirm substantial within-country spatial variation driven by market access conditions, with the economic penalties falling most heavily on farmers in remote, poorly connected locations (Bonilla Cedrez et al. 2020). In Nigeria specifically, the modal means of fertiliser transport is motorcycle, showing the inadequacy of the rural road network for agricultural logistics and confirming that the last-mile cost burden falls directly on smallholder farmers rather than on commercial logistics systems. These transport penalties generate a double disadvantage: farmers far from markets pay more for inputs while simultaneously receiving less for output, compressing net returns to technology adoption at both ends of the value chain simultaneously.

The fragility of Nigeria's market integration is compounded by the vulnerability of even partially integrated markets to supply chain disruptions. Amare, Abay, and Hatzenbuehler (2024)'s analysis of monthly food price data on Nigeria finds that the COVID-19 pandemic and associated lockdowns caused a two- to threefold weakening in the speed of price adjustment for key food items, with lockdown measures associated with a 5–10% reduction in the speed of readjustment towards long-run equilibrium. This demonstrates that the transport and logistics infrastructure underpinning market integration cannot absorb supply chain shocks without significant welfare consequences for farmers and consumers.

Land tenure insecurity

The Land Use Act of 1978 vests all land in state governors, conferring use-rights on smallholder farmers rather than ownership and generating multiple, compounding economic consequences. Collateral availability for agricultural credit is severely curtailed, since financial institutions cannot accept non-transferable customary rights as loan security. And incentives for long-term investment in soil improvement, irrigation infrastructure, and multi-season agronomic management are weakened when rights over the resulting improvement stream are insecure. Thus, production risk increases. Olagunju et al. (2023) finds that tenure security plays a significant role in mitigating production risk among Nigerian small-scale farmers, with insecure tenure leaving farmers more exposed to weather and other production shocks.

The household-level welfare consequences of tenure arrangements are directly measurable and fall disproportionately on women. Nnaji, Ratna, and Renwick (2022) finds that female-headed households are more food insecure than male-headed households, but that a one-acre increase in their access to land reduces their probability of food insecurity, providing a nationally representative estimate of the welfare value of improved land access for the most land-poor households. More broadly, Ibrahim, Hendriks, and Schönfeldt (2023) note that formally documented tenure and even informal land documents are associated with lower food expenditure shares, higher dietary diversity, and better livelihood coping strategies. Land tenure insecurity also constrains adoption of the technologies needed for climate adaptation, and Kehinde et al. (2022) finds that the adoption of climate-smart practices, including agroforestry, minimum tillage, crop rotation, and organic inputs, is generally low, and that land tenure and property rights are significant determinants of whether farmers adopt them.

Land tenure reform is structurally complicated by the federal-state governance architecture. Since land administration is a state matter under the Land Use Act, no single federal legislative action can resolve the problem, and any comprehensive approach requires either constitutional amendment or sustained, coordinated state-by-state legislative action – neither of which has been achieved in the nearly five decades since the Act came into force. The political economy of reform remains constrained by the interests of state-level actors who benefit from discretionary control over land allocation, a dynamic that has blocked reform across successive federal administrations regardless of stated policy commitments.

Policy implications: Agricultural technology in Nigeria

Nigeria's agricultural productivity deficit is not a shortage of proven technologies. It is a convergence of systemic institutional failures that prevent those technologies from reaching the farmers who could benefit from them most, and that erode the returns to adoption even for farmers who manage to access them. The constraints documented above operate simultaneously and reinforce one another across the full technology adoption cycle. A broken seed pipeline means that investments in credit, extension, and fertiliser subsidies reach farmers who cannot access reliable planting material. The absence of a functional farmer registry means that credit instruments, insurance products, and subsidy programmes cannot be targeted below the level of organised cooperatives, leaving the most credit-constrained subsistence-scale farmers systematically excluded. Chronically underfunded state-level extension systems mean that the knowledge of available technologies diffuses slowly and reaches last-mile smallholders last. Credit Risk Guarantee is limited in its reach by the same tenure insecurity and data deficits that constrain every other instrument reviewed here. A federal-state governance architecture with weak coordination mechanisms means that national policy ambitions are regularly defeated at the implementation stage. And a climate and active conflict crisis concentrated in the north operates on a scale that conventional agricultural development programmes are structurally unsuited to address.

A central finding of the agricultural technology literature is that the returns to identical technology packages vary substantially across farms, differing by soil quality, rainfall distribution, market proximity, household labour endowments, and managerial capacity. The Growth Enhancement Support Scheme, the Agricultural Transformation Agenda of 2010–2016, and the Agricultural Promotion Policy of 2016–2020 were all designed and administered as nationally uniform schemes. Evidence from GESS and analogous input subsidy programmes across sub-Saharan Africa consistently shows that the farmers most responsive to blanket subsidies are those already nearest to the adoption frontier, meaning that programme spending disproportionately accelerates uptake among the better-resourced while failing to reach those furthest behind. The welfare losses from this mistargeting are compounded across Nigeria's six zones.

Against this assessment, Nigeria's demonstrated capacity for agricultural progress is substantively grounded. Sustained investment by development partners and government bodies produced measurable poverty-reducing adoption effects for improved cassava and maize varieties. The recently launched FMAFS-NIMC NIN-linked biometric farmer registry represents a significant structural advance in agricultural programme targeting in Nigeria's recent policy history. Comparable digital advisory platforms have also demonstrated yield gains. Other interventions like the Growth Enhancement Support Scheme also show positive yield and productivity effects, confirming that delivery system failure, not policy instrument failure, was the primary binding constraint. The question is no longer whether Nigerian smallholder farmers respond productively to the right conditions – they demonstrably do. The binding challenge is whether Nigeria can build – across 36 state governments (plus the FCT), two constitutional tiers of authority, and six agro-ecological and geopolitical zones – the foundational systems of seed certification, biometric farmer identification, integrated agricultural data infrastructure, and coordinated public investment that the evidence shows are prerequisites for turning individual programme successes into a sustained national productivity trajectory.

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