Minister Urges Innovative Financing to Secure Nigeria’s Agricultural Future
Nigeria’s Minister of Agriculture and Food Security, Mohammed Kyari, has stressed the urgent need for innovative funding models in the agricultural sector, warning that traditional credit systems no longer meet the country’s developmental needs.
Kyari made the call on Tuesday during the 2025 FirstBank Agric and Export Conference in Lagos, themed “The Fundamentals of Building a Non-Oil Export-Driven Economy.” The event, organised by FirstBank, provided a platform for stakeholders to discuss how to reposition agriculture and non-oil exports as central pillars of Nigeria’s economy.
Represented by his Special Adviser (Technical), Ibrahim Alkali, Kyari argued that the sector’s outdated financing mechanisms were stifling growth at a time when food security and foreign exchange stability are national priorities.
“This is not an abstract policy debate; it is a matter of survival,” he said. “Nigeria cannot afford to remain at the mercy of oil price shocks. We must build our future on productivity, innovation, and resilience. That requires smarter institutions and financing instruments that reflect the realities of modern agriculture.”
Historical context: Nigeria’s unfinished diversification journey
Nigeria’s dependence on crude oil dates back to the 1970s, when an oil boom sidelined agriculture, once the nation’s economic backbone. Before oil revenues dominated, groundnuts from the North, cocoa from the West, and palm produce from the East positioned Nigeria as a leading agricultural exporter. But decades of neglect, coupled with policy inconsistencies, left the sector underfinanced and underperforming.
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Repeated calls for diversification—particularly after economic crises in the 1980s, 1999, and 2016—have largely remained on paper, with oil still accounting for over 80% of Nigeria’s foreign exchange earnings. Kyari’s remarks reflect renewed urgency to avoid repeating past cycles of vulnerability.
New models for a new era
Kyari proposed a shift toward performance-based financing, risk-adjusted lending, revenue-sharing, equity investments, and “pay-as-you-harvest” mechanisms—funding models already deployed in other emerging economies to transform agriculture from subsistence to surplus.
“Across the world, innovative finance has changed farming into wealth creation. Nigeria can achieve the same if we abandon outdated loan structures and embrace proven models,” he said.
The Minister also underscored the need for value addition. “Nigeria earns roughly $700m annually from raw cocoa exports, yet processed chocolate and derivatives could fetch five times that value. Every step up the value chain means more jobs, stronger industries, and better foreign exchange earnings.”
Challenges of logistics and standards
Kyari lamented the high costs of moving produce locally compared to exporting abroad. “It often costs more to transport goods from Kano to Lagos than from Lagos to Europe,” he noted, citing port congestion, poor cold-chain systems, and low compliance with international standards.
He called for a “zero-reject policy” to ensure Nigerian exports meet global benchmarks, preventing the frequent rejection of agricultural shipments abroad.
Broader government and private sector support
The Minister of Industry, Trade, and Investment, Dr. Jumoke Oduwole—represented by Nigerian Export Processing Council chief Mrs. Nonye Ayeni—reinforced the government’s non-oil export agenda, urging stronger links between farmers, SMEs, and exporters. She identified the National Single Window platform as key to reducing costs, boosting transparency, and cutting delays in export processing.
FirstBank’s Managing Director, Segun Alebiosu, described the conference as a “cornerstone” for economic diversification, pledging continued financial solutions across the agricultural value chain.
Lagos Governor Babajide Sanwo-Olu added that Lagos’s ports and logistics network make it the “springboard for Nigeria’s export ambitions,” while Niger State Governor Mohammed Bago pledged 100,000 hectares of farmland to Lagos to create structured large-scale food production.
The bigger picture
Experts note that without robust non-oil exports, Nigeria risks repeating the economic instability of past decades, when falling oil prices triggered inflation, currency crises, and mounting debt. Kyari’s call represents an acknowledgement that securing Nigeria’s future depends not just on growing food, but on financing it in smarter, globally competitive ways.
