June 20, 2024/CSL Research
The agriculture sector contributed 21.07% to overall GDP and grew by 0.18%, according to the Q1 GDP report released by the National Bureau of Statistics (NBS), a significant decline from 2.1% growth and 26.11% contribution to GDP recorded in Q4 2023.
The low output from the agricultural sector was a major drag to the overall GDP performance in Q1 2024. In 2023, Nigeria’s agricultural sector grew by 1.13% in real terms compared to the 1.88% growth recorded in 2022, indicating a decline of 40% while the sector’s contribution to GDP shrunk in 2023 to 25.18%, lower than its 25.58% contribution in 2022.
Agricultural output continues to decline largely on the back of idiosyncratic risks like insecurity, climate changes, and high input costs. Also, high levels of inflation and increasing production expenses such as fuel prices and logistics on the back of the removal of fuel subsidies, have impacted the sector negatively.
Agriculture remains the largest sector in Nigeria contributing an average of 24.73% to the nation’s GDP over the past ten years (2013 – 2023). Several factors are affecting the output in Nigeria’s agricultural sector, impeding its growth and productivity.
These factors include infrastructure deficiencies such as poor transportation networks and inadequate irrigation systems, environmental challenges like climate change leading to unpredictable weather patterns, poor access to finance, lack of investment in the sector and misallocation of resources.
That said, Insecurity has been the most significant hindrance to growth in the Nigerian agricultural sector in recent years. Insurgency, banditry, kidnappings, and communal conflicts have created a risky environment that discourages farmers from going
to their farms and deters investments in the sector.
The agricultural sector comprises four sub-sectors: Crop Production, Livestock, Forestry, and Fishing. We reiterate that to enhance productivity in the agriculture sector, Nigeria must address the structural and institutional obstacles that have hampered its development.
Addressing these obstacles requires a multifaceted approach that involves coordinated efforts by all stakeholders. Improving productivity in the agricultural sector is particularly essential at a time when the country is in dire need of non-oil export earnings. The share of agriculture in Nigeria’s total export earnings remains small compared to crude oil exports. In Q4 2023, agriculture accounted for less than 4% of total exports relative to crude oil (81.23%).
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