By Agrobroadcast Team
Nigeria’s agricultural industry opened the year on a weak footing, as mounting operational pressures pushed the sector into contraction in January 2026, the latest Business Confidence Monitor (BCM) by the Nigerian Economic Summit Group (NESG) has shown.
The BCM, a survey-driven assessment of business sentiment and near-term economic expectations, revealed that the agricultural Business Performance Index dropped steeply to 99.5 points in January, from 112.9 points recorded in December 2025.
This decline represents the sector’s poorest showing since August 2025 and signals contraction, as index readings below 100 indicate reduced activity.
According to the report, the downturn was largely triggered by setbacks in livestock and agro-allied activities, alongside subdued output in crop production. Performance across the five agricultural sub-sectors was uneven, reflecting persistent structural challenges.
Both livestock and agro-allied sub-sectors slid to 97.9 points, erasing the modest gains achieved a month earlier. Crop production also slowed, while forestry remained around the neutral mark.
Fishing was the only sub-sector that stayed in expansion territory, though at a weaker level of 103.2 points.
The contraction occurred despite Nigeria’s broader business environment remaining resilient.
Manufacturing, services and non-manufacturing sectors all maintained expansion above the 100-point benchmark, leaving agriculture and trade as the only sectors to record a decline during the period.
NESG attributed agriculture’s weak performance to a mix of insecurity in farming communities, limited access to finance, unstable electricity supply and lingering infrastructure deficits, all of which disrupted agricultural value chains nationwide.
The report also highlighted a sharp rise in operating costs. The BCM cost-of-doing-business index jumped to 90.5 points in January from 54.7 points in December, while input prices surged to 96.9 points from 68.9 points. These increases were linked to fuel price adjustments, tax reforms and persistent inflationary pressures.
For a sector heavily reliant on energy, transportation and imported inputs, the rising costs further compressed profit margins and weakened investor and operator confidence.
Looking ahead, NESG said expectations for the agriculture sector remain guarded. The Future Business Expectation Index for agriculture stood at 110.2 points, indicating modest optimism compared to stronger confidence levels in manufacturing and non-manufacturing sectors, which recorded 155 and 140 points, respectively.
While businesses across the economy are banking on currency stability, supportive policies and stronger export demand to drive growth, the group warned that election-related uncertainties and policy inconsistencies could undermine investment and delay recovery, particularly in fragile sectors like agriculture.
Analysts at the policy organisation stressed that the contraction underscores the need for urgent, targeted measures to stabilise food production, reduce farm input costs and improve rural security, noting that agriculture remains central to employment generation and Nigeria’s food security ambitions.