The agriculture sector in Nigeria shows a positive attitude towards investment. This AU analysis
highlights three main investment drivers of the Nigerian agriculture sector:
(i) Modernisation of agricultural enterprises. As in many other countries, farmers in Nigeria suffer from
the weak position they occupy in the value chain, facing difficulties relating to increasing input costs
and fluctuating selling prices of their products. To overcome these barriers, Nigeria farmers invest in
the competitiveness of their enterprises and in solutions for shortening the value chain. In addition, to
improve their position in the market, Nigeria farmers adopt a stricter set of production standards in
terms of quality, environmental impact and animal welfare.
(ii) Income diversification. Nigeria farmers are diversifying their activities to capture additional sources
of income. They are mainly combining agricultural production with services that benefit other
industries, such as agri-tourism and renewable energy.
(iii) Expansion of farms’ size and production capacity of some agricultural sub-sectors. This happens
in particular, in the dairy sub-sector, where the abolishment of the milk quota has shifted production
from mountains to more favourable areas. Restriction removal has generated a positive effect and led
to an increase in investment related to purchase or rent of additional land.
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