ACCI raises concern over agriculture’s low contribution to Nigeria’s GDP

By Benson Daniel

The Abuja Chamber of Commerce and Industry has raised concerns over the relatively low contribution of Nigeria’s agricultural sector to economic output, despite the country’s vast agricultural potential and the large number of Nigerians who depend on farming for their livelihoods.

The chamber said the sector remains central to Nigeria’s economic development but has yet to achieve the level of productivity and value addition required to significantly transform the wider economy.

The concern comes at a time when agriculture remains one of the major components of Nigeria’s Gross Domestic Product and a critical source of employment, particularly across rural communities.

Despite its importance, the sector continues to face a combination of structural challenges that have limited productivity and reduced the ability of farmers and agribusinesses to generate higher value from agricultural activities.

These challenges include limited access to affordable financing, inadequate mechanisation, poor rural infrastructure, insecurity, limited irrigation and weak storage and processing capacity.

The chamber stressed that improving agricultural productivity should go beyond increasing food production. Greater attention, it said, must also be given to processing, packaging, logistics and access to domestic and international markets.

Nigeria loses a significant portion of agricultural output through poor handling and inadequate storage, limiting the income farmers can earn while putting additional pressure on food prices.

The development of stronger agricultural value chains could therefore help farmers move from selling raw commodities to producing higher value processed goods.

For businesses, increased investment in agro processing could create opportunities across manufacturing, transportation, packaging, cold chain logistics and retail.

The chamber’s position also highlights the need for stronger collaboration between government and private sector operators to unlock investment in agriculture.

Access to finance remains particularly important, as many smallholder farmers and agricultural businesses struggle to obtain credit on terms that match the seasonal nature of farming.

The sector also needs greater access to modern equipment and technology. Mechanisation can help improve productivity, reduce dependence on manual labour and enable farmers to cultivate larger areas more efficiently.

Irrigation development is another area that could help reduce the sector’s dependence on rainfall and improve production throughout the year.

Improving rural roads and other infrastructure would also make it easier for farmers to move produce from farms to markets while reducing transportation costs and post harvest losses.

The chamber’s concerns come against the backdrop of persistent food price pressures, making the performance of agriculture increasingly important to Nigeria’s broader economic outlook.

Higher agricultural productivity could help expand food supply, improve farmers’ incomes and ease some of the pressures contributing to elevated food costs.

There is also a growing argument for greater private sector participation in the sector, particularly in areas such as commercial farming, processing, storage, logistics, agricultural technology and export development.

Nigeria’s agricultural potential extends beyond food production, with opportunities in cash crops, livestock, fisheries and agro processing capable of generating export earnings and creating jobs.

However, unlocking these opportunities will require consistent policies, improved security, access to capital and stronger links between farmers and markets.

The ACCI’s position reinforces the need for agriculture to become more productive and commercially driven if it is to play a bigger role in Nigeria’s economic diversification efforts.

With the sector employing millions of Nigerians and accounting for a substantial share of economic activity, stronger investment in agriculture could have an impact well beyond farming communities.

The challenge for policymakers and private investors is to turn Nigeria’s agricultural potential into measurable output, higher incomes and greater value addition across the entire chain.