Until recently, the Nigeria’s agriculture was apparently neglected in favour of the oil sector but
falling global oil prices, as well as the problems in the Niger Delta, has made the federal
government to turn to agriculture as a new economic growth area.
The sector grew by anestimated 7.7% in 2007, compared to growth of 7.4% in 2006, and is expected to continue toincrease persistently.
Agriculture sector in Nigeria is still very much dominated by traditional small scale local farmers
growing crops such as maize, palm oil, yams, cassava, rubber, cotton, soya bean and cashew
nuts, tobacco, groundnuts and cocoa beans. Commercial farming is still very small and limited.
The federal government, faced with rising food prices and the large amounts of foreign
exchange leaving the country to pay for imported food, has introduced several initiatives meant
to revive and exploit the potential of agriculture. These include financial incentives (for
companies processing food), subsidies (for farming equipment and fertiliser), and research
initiatives into improved crop utilisation.
Inadequate processing capacity is one of the key structural deficiencies in the agricultural
economy in Nigeria. Investment in this sub-sector consequently attracts pioneer status: tax
holidays, tariff concessions, financing and export support.