Import Waivers, Insecurity Push Nigeria’s Agricultural Trade Balance Into Deficit

Nigeria’s agricultural trade balance has swung into deficit after two consecutive years of surpluses, as weaker agricultural exports and continued food imports put pressure on the country’s trade position.

Data from the National Bureau of Statistics showed that Nigeria recorded an agricultural trade deficit of ₦56.13bn in the first half of 2026, compared with a ₦740.27bn surplus recorded in the corresponding period of 2025.

The reversal represents a ₦796.40bn deterioration in the agricultural trade balance within one year.

The shift was driven largely by a sharp decline in agricultural exports. Export earnings fell by 33.28 per cent, from ₦2.96tn in H1 2025 to ₦1.98tn in H1 2026.

Agricultural imports, meanwhile, declined at a much slower pace, falling by just 8.50 per cent from ₦2.22tn to ₦2.03tn over the same period.

Import Waivers Put Pressure on Local Producers

Agribusiness stakeholders attributed part of the reversal to government policies that reduced tariffs on selected food imports as authorities sought to ease food inflation and improve food availability.

Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, said reduced tariffs on commodities such as rice and palm oil had made imports more attractive relative to locally produced alternatives.

He warned that the policy could undermine domestic production, investment and employment if local businesses are unable to compete with cheaper imported products.

While lower tariffs on agricultural machinery and production equipment could support farmers and processors, stakeholders argue that incentives for finished food imports could have the opposite effect by weakening demand for locally produced commodities.

Insecurity Further Weakens Agricultural Output

Beyond trade policy, insecurity remains a major constraint on Nigeria’s agricultural production and export capacity.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said insecurity had forced many farmers to abandon their farms, with some displaced into internally displaced persons’ camps.

The reduction in farm activity has consequences beyond food supply, as lower domestic production also limits Nigeria’s ability to generate agricultural export surpluses.

“You can only export when you have the output,” Yusuf noted.

He also pointed to high input costs and declining produce prices as additional factors discouraging investment in agriculture. Imported fertilisers, agrochemicals, machinery and other inputs have become more expensive amid exchange-rate pressures.

Calls Grow for Stronger Domestic Production

Industry stakeholders are urging the Federal Government to shift greater attention towards policies that expand domestic production and processing rather than relying heavily on imports to manage food inflation.

Yusuf called for measures to reduce the cost of fertiliser, agrochemicals, agricultural machinery and improved seedlings, alongside the introduction of a minimum guaranteed price mechanism to protect farmers when market prices fall.

Banjoko also urged the government to accelerate the development of Special Agro-Industrial Processing Zones, arguing that greater investment in local processing could help Nigeria meet domestic demand while creating capacity for agricultural exports.

Trade Balance Raises Wider Investment Concerns

The return to an agricultural trade deficit highlights the structural challenges facing Nigeria’s agricultural economy.

While temporary import interventions can help increase food supply and ease price pressures, prolonged dependence on imports could weaken incentives for domestic production, particularly when local producers face high financing, energy, logistics and input costs.

For Nigeria to rebuild its agricultural trade surplus, industry stakeholders say the focus must increasingly shift towards farm security, lower production costs, agro-processing, infrastructure and export competitiveness.

The latest trade figures suggest that without improvements in domestic production capacity, efforts to contain food inflation through imports could come at the expense of Nigeria’s longer-term agricultural competitiveness.