Despite contributing nearly a quarter of GDP and employing half the workforce, Nigeria's agricultural sector is trapped in low productivity by mutually reinforcing barriers: dysfunctional seed systems, credit market exclusion, absent farmer registries, and federal–state coordination failures. Closing these gaps requires not piecemeal programmes but systemic investment in identification infrastructure, pluralistic seed supply, and risk-sharing mechanisms capable of reaching the most constrained smallholders.
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 first of two articles exploring how evidence on Agricultural Technology relates to Nigeria. Read the second article here.
Nigeria's agricultural sector contributes approximately 23% of real GDP and utilises roughly 35–40% of the labour force, yet by almost every productivity measure the sector is underperforming its potential. Crop yields remain well below the global average, modern input use is low and spatially uneven, and food insecurity has increased over the past decade. As of early 2024, an estimated 26.5 million Nigerians were projected to face high levels of food insecurity; by the fourth quarter of that year, this had risen to approximately 31.8 million (Akpoghelie et al. 2024; UNICEF 2025). Food price inflation reached a 28-year high of 40% in April 2024, with food imports expanding by approximately 11% per annum; during this time, an additional 14 million Nigerians fell below the poverty line (African Union 2023; World Bank 2024). This is against a backdrop in which more than 133 million people are classified as living in extreme multidimensional poverty, rendering the costs of agricultural underperformance inseparable from the country's broader development challenge.
Two structural features of the Nigerian context are essential for interpreting the evidence. First, Nigeria is not a single agricultural economy. The country encompasses six agro-ecological zones and six geopolitical zones governed through 36 states and a Federal Capital Territory. Nigeria's north and south are effectively distinct agricultural economies, with the north functioning as a cereal belt producing sorghum, millet, cowpea, and rice, and the south specialising in cassava, oil palm, cocoa, and rubber. Under the 1999 Constitution, both the Federal Government (National Assembly) and State Governments (State Houses of Assembly) have the power to make laws regarding agricultural development. This arrangement generates chronic coordination failure, since federal programmes require active state-level co-implementation that is inconsistently delivered, while state governments retain near-exclusive authority over land allocation under the Land Use Act 1978.
The north additionally confronts acute constraints: the Boko Haram insurgency reduced sorghum production in Borno State by up to 82% between 2010 and 2015, with rice and millet declining by 67% and 55%, respectively, while farmer-herder conflicts across the Middle Belt transition zone had displaced an estimated 300,000 people by mid-2018, with displacement continuing since, forcing farmers off their land in several of the country's most productive food-producing states (Adelaja and George 2019).
Second, the constraints holding smallholder farmers back cannot be attributed to any single bottleneck. Credit access, agricultural insurance, knowledge and extension services, rural infrastructure, land tenure security, seed system integrity, data governance, and institutional coordination failures all operate simultaneously and interact with one another. I draw on the systematic review of the agricultural technology evidence base for sub-Saharan Africa (Suri et al. 2024) and on Nigeria-specific empirical evidence to examine each of these dimensions.
Stagnant productivity
Estimates of agricultural total factor productivity (TFP) for sub-Saharan Africa show an average annual growth of only about 1%, a rate well below that achieved in East and South Asia (Fuglie, Morgan, and Jelliffe 2024; Suri et al. 2024). Nigeria's trajectory is consistent with or worse than the regional average, with country-level TFP estimates placing productivity growth near zero in recent decades, consistent with observed stagnation in per-hectare yields and negligible improvement in input use efficiency. A longitudinal study drawing on data from more than 55,000 smallholder farms across six African countries corroborates this (Wollburg et al. 2024).
Nigeria is the world's largest producer of cassava by volume, yet average yields of approximately 6–7 tonnes per hectare remain well below the global average of around 11 tonnes per hectare, and far short of the 25–30 tonnes per hectare achievable under improved varieties and good agronomic management in leading producer countries (Adebayo 2023; Wossen et al. 2020). Despite the production volume, Nigeria accounts for only 2% of the global cassava processing market, reflecting a severe post-harvest infrastructure constraint that forecloses value addition downstream of the farm gate.
In the cereals sector, the welfare returns to improved varieties are well-documented at the farm level, and the joint adoption of drought-tolerant maize varieties and organic fertiliser delivers the largest productivity and income payoffs of any single-crop intervention package studied in the Nigerian context (Oyetunde-Usman, Shee, and Abdoulaye 2024; Oyinbo et al. 2019). Despite the availability of high-yielding varieties, Nigeria's maize output remains well below potential, pointing to systemic barriers embedded in markets, institutions, and infrastructure.
Weak seed system
Nigeria operates two parallel systems, namely a formal system regulated by the National Agricultural Seed Council, and a dominant informal system in which farmers save, exchange, and purchase seeds through local markets in the absence of independent quality verification (Oladele and Ojogu 2025; Iorlamen et al. 2021; Kuhlmann et al. 2018). Nationally representative panel data linked to seed company location data confirms that certified seed use among Nigerian smallholders remains low, that farm-level yield effects vary substantially by agro-ecological zone, and that proximity to seed companies is a significant determinant of whether farmers access certified seed at all. This points to distribution geography rather than farmer preferences as a primary constraint (Hiroyuki et al. 2022).
This structural gap is compounded by the weakness of intermediary systems. A primary survey of community seed schemes producing maize, rice, sorghum, cowpea, and soybean in Kano State finds that while many such schemes emerged to fill gaps in local seed supply, most apply only modest quality control measures, and fuller quality assurance remains skill-intensive and beyond the reach of the majority without sustained external technical support (Takeshima et al. 2025).
The pervasiveness of counterfeit and adulterated seed constitutes an economically significant and poorly acknowledged constraint. Nigerian seed companies continue to report numerous cases of fraudulent seeds per year (Okelola et al. 2023; Bentley, Ajayi, and Adelugba 2011). Access barriers compound the fraud problem. A systematic review of legume seed system performance across sub-Saharan Africa documents that smallholders predominantly depend on informal seed systems for most legume seeds, and identifies three primary barriers to formal sector adoption: lack of timely access to seeds in adequate quantities, high seed costs, and limited information on new varieties (Breen et al. 2024). These findings are consistent with the broader Nigerian seed sector evidence and are directly documented across crop categories in the Nigeria-specific literature (Stuart et al. 2021; de Boef et al. 2025; Daniel and Adetumbi 2004; Wossen et al. 2024).
Comparative analysis of cowpea seed systems in Nigeria and Ghana further shows that the profitability and cost-effectiveness of seed delivery varies significantly across formal, semi-formal, and informal producers, and that investment returns are sensitive to both price and yield shocks, which highlights why the cost structure of the formal system systematically prices out the smallholder majority and why no single delivery model can substitute for a pluralistic, well-financed seed supply architecture (Oyinbo et al. 2026). These barriers together direct the majority of smallholder demand back into the informal seed economy, meaning the formal system is failing simultaneously on price, supply reliability, and distribution coverage.
One of NASC's responses has been the introduction of SEEDCODEX, an electronic authentication system launched in 2020 with AGRA support that enables farmers to verify seed legitimacy via SMS prior to purchase (Okelola et al. 2023). Evidence shows that authentication technology addresses the verification problem rather than the supply problem (Sisay et al. 2025; Kim et al. 2014). Closing the seed system gap therefore requires sustained public investment in foundation seed production, last-mile distribution infrastructure, and an enforcement capacity commensurate with the scale of the problem, conditions that electronic authentication alone cannot create.
Farmer identification deficit
Nigeria has so far been unable to have reliable knowledge of who its farmers are, where they farm, and what constraints bind their production decisions. The Growth Enhancement Support Scheme (GESS), the most ambitious agricultural subsidy programme in Nigeria's recent history, demonstrated the consequences of attempting to build a targeted transfer programme without this infrastructure. Farmers registered through self-declaration of land size and mobile phone number. A rigorous household-level evaluation using instrumental variables finds that GESS was effective in improving productivity and welfare outcomes among verified beneficiaries, though with a modest benefit-cost ratio, with selection bias occurring primarily at the awareness and registration stage rather than in the subsidy mechanism itself (Wossen et al. 2017).
A national survey of rural farmers in Nigeria further confirms that where the mobile phone-based e-wallet system did reach informal sector farmers, it constituted a critical factor in enhancing farm entrepreneurship (Uduji, Okolo-Obasi, and Asongu 2019). Taken together, the evidence confirms that GESS failed not as a policy instrument but as a targeting and delivery system – a distinction with direct implications for successor programme design.
The National Agricultural Growth Scheme – Agro-Pocket (NAGS-AP) is the Federal Government's principal successor designed to address GESS's targeting and delivery failures while retaining the smart subsidy model. The programme uses an ICT-based platform operating through more than 600 accredited agro-dealers to deliver subsidised climate-resilient seeds, fertilisers, and agro-chemicals to smallholder farmers, targeting rice, maize, cassava, sorghum, millet, and wheat. Though, NAGS-AP represents a structural improvement over GESS as it operates through established agro-dealer networks rather than mobile voucher redemption and incorporates a digital beneficiary verification system reducing ghost-farmer registrations. However, the fundamental question NAGS-AP has not yet resolved is whether its agro-dealer delivery architecture reaches the most remote and credit-constrained smallholders, or whether, like GESS before it, programme benefits accrue disproportionately to farmers already closest to input markets.
Recently, the Federal Ministry of Agriculture and Food Security (FMAFS) formalised a partnership with the National Identity Management Commission to launch a National Identity Number-linked biometric digital farmer registry. The registry links each farmer's NIN and biometric identity to geo-tagged farmland coordinates, crop type, and soil characteristics, enabling targeted delivery of inputs, extension, credit, and insurance while eliminating ghost-farmer registrations. The G2P card connected to the registry operates offline via biometric point-of-sale devices, directly addressing the network coverage failures that undermined GESS voucher redemption.
Without a credible farmer registry, targeted delivery of inputs and credit cannot reach the most constrained farmers, linking farmers to extension and insurance products remains unreliable, building the longitudinal data needed to evaluate programme effectiveness is not feasible, and tracking household-level progress towards food security objectives cannot be done systematically. Every subsequent layer of agricultural programme investment built in the absence of reliable identification is therefore poorly targeted by design, and the costs of this mistargeting compound across programmes rather than remaining contained within any single one.
Several states had already begun developing independent farmer registration systems before the federal initiative was announced. Without a national framework mandating state-level data contribution to the federal registry in a standardised format, the system risks fragmenting into 36 non-interoperable databases of the kind that have repeatedly defeated federal agricultural programme ambitions.
Credit constraints
Credit and liquidity constraints remain the most consistently documented barrier to technology adoption among Nigerian smallholder farmers. Survey evidence shows that technology adopters are nearly three times more likely to report credit access than non-adopters, yet the majority of smallholder farmers remain excluded from formal financial markets entirely (Awotide et al. 2016; Awotide et al. 2015; Balana and Oyeyemi 2022). Despite agriculture contributing approximately 23% of GDP, the sector receives only around 4–5% of total commercial bank loans – a share that peaked at 6.18% in 2022 before declining to 4.82% in 2024. This mismatch cannot be explained by default risk alone as information asymmetry, tenure insecurity, and the absence of rural financial infrastructure combine to make smallholder lending systematically unattractive to formal financial institutions at prevailing interest rates, independent of actual borrower creditworthiness (Sheahan and Barrett 2017). Relaxing credit constraints therefore requires addressing the structural determinants of perceived lending risk alongside any direct intervention in credit markets.
A credit intervention, the Anchor Borrowers' Programme launched by the Central Bank of Nigeria in 2015, attempted to address credit market failures through a different mechanism: linking smallholder out-growers directly to large-scale processors as anchor firms, with CBN credit flowing through deposit money banks to fund input provision and working capital. The programme's design intent was to create commercial linkages between over 600,000 smallholder farmers and reputable processors while circumventing the collateral constraints that excluded smallholders from conventional lending (Obih and Baiyegunhi 2018). Assessment of its implementation modalities identifies persistent weaknesses, including inadequate farmer registration and supervision, weak monitoring and evaluation systems, challenges in timely input delivery, and a breakdown in the accountability relationship between anchors, banks, and smallholders, that mirror the structural failures documented in the GESS experience (Coker et al. 2018).
Established by the Central Bank of Nigeria in 2013 and formally incorporated as a public liability company in 2015 with seed capital of $500 million, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) operates not as a direct lender but as a risk-sharing intermediary with five integrated mechanisms: a Credit Risk Guarantee absorbing up to 75% of lending risk, an insurance component, a technical assistance facility, a bank incentive mechanism, and an agricultural bank rating system (Polycarp 2018; Uche, Ekene, and Miebi 2024). By 2018, NIRSAL had issued credit guarantees for 454 agricultural projects valued at ₦61.161 billion and trained 112,000 farmers across rice, cocoa, cotton, and tomato value chains (Polycarp 2018).
However, only around 7% of Nigerian farming communities report having received bank loans, and various structural barriers continue to constrain NIRSAL's reach, including a farmer identification system too weak to verify borrower identity at scale and insecure land tenure that prevents most smallholders from satisfying collateral requirements. Similarly, the Nigeria Sovereign Investment Authority (NSIA) provides a complementary channel through two vehicles: the Fund for Agricultural Finance in Nigeria and the NSIA Agri Plus Fund, both designed for agri-SME commercialisation, through their commercial return requirements preclude direct engagement with the subsistence-scale majority.
Digital finance has begun to fill portions of the credit gap from below. Fintech platforms provide agricultural input credit through digital systems. Case studies from Nigeria confirm that digital finance is increasingly embedded in agri-food value chains, linking farmers, processors, and traders in ways that improve transparency and efficiency (Russel 2025). Research on digital financial service adoption among smallholder farmers in North Central Nigeria confirms farmer engagement with digital financial platforms, though uptake of loan products remains lower than that of other available digital financial services, reflecting the structural mismatch between standard loan repayment schedules and the seasonality of agricultural income flows (Ogunfolaju, Kolawole, and Ahmed 2026).
Read the second part of this article here.
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