Agric Funding Hits N3.8trn as Nigeria Battles Production, Import Gaps

Fidelis David in Akure

Despite a sharp rise in financing to Nigeria’s agricultural sector, the country is yet to fully translate the growing capital inflow into increased productive capacity, a new report by Regius Capital Limited has revealed.

The report released on Monday, titled, “Financing Nigeria’s Agriculture: What Five Years of Credit, Capital and Output Data Reveal,” found that bank credit to agriculture surged from approximately N1.46 trillion at the end of 2021 to N3.81 trillion by January 2026.

The increase raised questions as to why the surge in funding had not been matched by a corresponding transformation in food production.

According to the report, identified agrifood capital-market issuances between 2020 and the first half of 2026 reached approximately N1.73 trillion, reflecting the growing appetite for financing across Nigeria’s agricultural value chain.

However, Regius Capital said the more important question was not simply how much money had entered the sector, but “where the capital has been deployed, what it has financed, and how significant it is relative to agricultural output, household food expenditure and trade.”

The analysis stated that Nigeria’s agricultural GDP reached approximately N103.9 trillion in 2025, while the annual household food bill was estimated at N82 trillion.

It cautioned that the sharp increase in the nominal value of agricultural output should not automatically be interpreted as equivalent growth in physical production, highlighting the effect of inflation, commodity prices, and foreign exchange movements on headline figures.

The report further highlighted the paradox in Nigeria’s agricultural trade, revealing that the country recorded approximately N5.07 trillion in agricultural exports and N4.76 trillion in agricultural imports in 2025.

Regius Capital explained that rising export earnings could sometimes reflect higher global commodity prices rather than significant increases in physical export volumes, while continued agricultural imports point to persistent gaps in domestic production and processing capacity.

The report also found that institutional capital remained heavily concentrated in businesses with scale, audited financial records, identifiable cash flows, assets, and established off-take arrangements, leaving primary production and other upstream activities significantly underrepresented in the public-market financing space.

The report stated, “Expanding investment will depend not only on the volume of financing available, but also on where capital is deployed, the tenor and cost of that capital, and the ability to convert agricultural value chains into bankable transactions.”

It said the next phase of agricultural financing must go beyond simply increasing the amount of money available to farmers and agribusinesses, recommending structures capable of making a wider range of agricultural projects attractive to institutional investors.

Among the mechanisms proposed were consortium-led project special purpose vehicles, blended and catalytic capital, guarantees and credit enhancement, milestone-based capital deployment, longer-tenor project debt, and commercial paper for working-capital cycles.

The report also advocated structures that could aggregate fragmented agricultural operators into larger, institutionally financeable platforms, stating that such arrangements can help bridge the gap between Nigeria’s vast agricultural opportunities and the risk requirements of formal capital providers.

Regius Capital stated that Nigeria’s agricultural funding challenge was both a capital gap and a structuring gap, stressing that unlocking the sector’s full potential would require capital that is not only larger in volume but also better matched to the realities, risks and timelines of agricultural production.