Nigeria's agricultural trade balance has shifted from a surplus to a deficit, according to recent data from the National Bureau of Statistics. The balance swung from a N740.27 billion surplus in the first half of 2025 to a N56.13 billion deficit in H1 2026. This change is attributed to a 33.28% decline in agricultural exports, which fell to N1.98 trillion in H1 2026 from N2.96 trillion in H1 2025. Agricultural imports also decreased, but at a lower rate of 8.50%, from N2.22 trillion to N2.03 trillion.
The decline in agricultural exports and increase in imports are linked to government policies aimed at addressing hunger and insecurity. The government granted import waivers for certain products, such as palm oil and rice, which reduced import tariffs. This made it more favorable for people to import rather than patronize local producers, according to agribusiness experts. The Chairman of the Lagos Chamber of Commerce and Industry's Agricultural and Allied Group, Tunde Banjoko, noted that the waivers hurt domestic producers.
The import waivers, combined with insecurity on farms, have led to a decline in local production and employment. Banjoko explained that the waivers discouraged local production and reduced employment, as some factories may shut down due to the inability to compete. He also pointed out that weak funding for processors compounds the problem, as foreign direct investment mainly flows into the capital market rather than production and processing.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, identified two major factors behind the deficit. The first was the government's decision to allow food imports to tackle inflation, which had become a significant challenge. Yusuf also noted that insecurity worsened the supply gap and cut export capacity, as many farmers left their farms due to insecurity and ended up in IDP camps.
Insecurity and high input costs have further discouraged farming, according to Yusuf. He stated that most inputs are imported, and the exchange rate situation has seriously affected the cost of inputs. Additionally, falling produce prices have made farming less attractive. Yusuf urged the government to cut the cost of fertilizer, agrochemicals, machinery, and improved seedlings.
Experts are calling for government intervention to support local producers and stimulate agricultural exports. Banjoko recommended speeding up the Special Agro-Industrial Processing Zones program, which can help increase production and exports. Yusuf suggested that the government establish a minimum guaranteed price for agricultural produce to protect farmers from price fluctuations.
The shift from a surplus to a deficit in Nigeria's agricultural trade balance has significant implications for the country's economy and food security. The government will need to address the challenges facing the agricultural sector, including insecurity, high input costs, and lack of access to funding, to restore the sector's growth and competitiveness.
Key points
- The Nigerian government's import waivers and insecurity on farms have contributed to a decline in local production and a shift from a surplus to a deficit in the country's agricultural trade balance.
- Experts recommend government intervention, such as speeding up the Special Agro-Industrial Processing Zones program and establishing a minimum guaranteed price for agricultural produce, to support local producers and stimulate agricultural exports.
- The decline in agricultural exports and increase in imports have significant implications for Nigeria's economy and food security.
