Agricultural Sector Growth Declines in 2023

African Development Bank support will give to agricultural sector and value chain entrepreneurs greater access to the financial and non-financial services of the Tanzanian Agricultural Development Bank (TADB)
(Source: AfDB)

May 24, 2024/CSL Research

Nigeria’s agricultural sector grew by 1.13% in 2023 in real terms compared to the 1.88% growth recorded in 2022, indicating a decline of 40%. The data also revealed the sector’s contribution to GDP shrunk in 2023 to 25.18%, lower than its 25.58% contribution in 2022. The agricultural sector comprises four sub-sectors: Crop Production, Livestock, Forestry, and Fishing. Agricultural output slumped to an all-time low of 0.905 in Q1 2023, mainly due to distinctive risks like insecurity, climate change, and high input costs. Also, increasing production and distribution expenses on the back of removing fuel subsidies and high inflation have negatively impacted the sector.  

We believe that poorly developed market infrastructure, particularly inadequate storage facilities and transportation networks, limits farmers’ market access and leads to substantial post-harvest losses. Additionally, inconsistent government policies have significantly impacted agricultural productivity and profitability. However, insecurity is the biggest hindrance to growth in the Nigerian agricultural sector. The pervasive security challenges in Nigeria, such as insurgency, banditry, kidnappings, and communal conflicts, create a risky environment that deters investments in the sector. A holistic approach is essential to tackle this menace, which will help promote economic growth and ensure food security. 

Addressing the challenges faced by Nigeria’s agricultural sector requires a collective effort from all stakeholders. It is not a task that a single entity or group can accomplish. To enhance productivity and resilience in the sector, we must tackle the structural and institutional obstacles that have hindered its development. This multifaceted approach involves enhancing access to finance, improving infrastructure, implementing supportive policies, investing in education and training, and promoting sustainable agricultural practices. Each of these measures plays a crucial role in transforming the Nigerian agricultural sector into a more productive and resilient component of the economy.

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