Almost 45% of the Nigerian workforce is employed by the agricultural sector, contributing 26% to the nation’s GDP. As 2025 unfolds, this sector is entering a phase of cautious optimism due to projections of easing inflation, potential interest rate reductions, and modest economic expansion. As a result, agro entrepreneurs may experience improved planning, renewed opportunities, and stability.
According to a recent outlook report by Vestance, presented at a moderated session in Nigeria, global economic expansion, though slight, combined with a stabilising naira and improving domestic indicators, look promising for agribusiness. Export crops such as sesame and sorghum are poised for growth, driven by international demand and broader applications, especially in the brewing and feed industries. Additionally, foreign direct investment is expected to rise, supported by anticipated lower global interest rates and increased European demand.
Nevertheless, risks remain prominent. Global trade uncertainties, made worse by renewed US-China tensions and geopolitical instability in regions like the Middle East and Eastern Europe, could drive up the cost of agricultural inputs. This, in turn, risks stoking inflation. The sector continues to grapple with longstanding challenges: underwhelming policy implementation, budgetary neglect (with agriculture receiving less than 1.3% of the national budget), high fuel and energy costs, unreliable infrastructure, limited credit access, and persistent insecurity in farming regions.
The report warns of rising maize prices, impacting feed producers and poultry farmers. While maize production may see slight growth, it will not suffice to stabilise prices. Agribusinesses may need to explore alternatives like sorghum or millet, invest in processing capacity, and consider supply chain instruments such as forward contracts.
Crop2cash COO Emem Essien identified climate-smart technologies, including early-maturing seeds and precision irrigation, as crucial for navigating weather volatility. With lending rates predicted to decline, more agribusinesses might access the credit necessary to adopt these innovations.
Foreign investment remains pivotal. Esther Adegunle, Associate Director at DAI, highlighted that upcoming global rate cuts could favour Nigerian agribusiness. However, she cautioned that sustainability and compliance with international standards would be vital to competitiveness. She also underscored the importance of effective policy execution to unlock the sector’s export and value-addition potential.
This report is based on insight gained from What Does 2025 Hold for Nigerian Agriculture?
Image Credit: FreePiK
