Agriculture & Manufacturing Incentives: Are They the Key to Diversifying Nigeria’s Investment Base?

For decades, Nigeria’s economy has leaned heavily on crude oil exports, leaving other sectors underdeveloped and vulnerable to global price shocks. In recent years, policymakers have renewed their push to diversify the economy, and two sectors; agriculture and manufacturing, have emerged as top priorities. With new tax credits and incentives targeted at these industries, the big question is whether they can truly attract sustainable investment, strengthen supply chains, and generate long-term job opportunities.

The Case for Agriculture and Manufacturing

Agriculture already contributes over 20% to Nigeria’s GDP and employs millions of people, yet much of its potential remains untapped. Farmers often lack access to modern equipment, processing facilities, and financing, which keeps productivity low. On the other hand, manufacturing accounts for less than 10% of GDP, but it holds the power to create more value from Nigeria’s raw materials by converting them into finished goods. Together, these two sectors could form the backbone of a diversified investment base if properly incentivized.

The government has recognized this and is rolling out a range of tax credits, grants, and policy support. These incentives are designed to reduce production costs, attract local and foreign investors, and promote value addition within Nigeria’s borders rather than exporting raw commodities.

Tax Credits and Policy Incentives

One of the most notable moves is the introduction of tax relief for companies investing in agriculture and renewable energy projects tied to agro-processing. For example, businesses that set up rice mills, cassava processing plants, or dairy factories can now enjoy reduced corporate income taxes for several years. Similar credits are available for manufacturers who invest in energy-efficient machinery or establish plants in underdeveloped regions of the country.

Additionally, import duty waivers on agricultural equipment and industrial machinery aim to lower the cost of entry for new players. By reducing the tax burden, the government is signalling that agriculture and manufacturing are not just social priorities but also viable investment opportunities.

Infrastructure and Supply Chain Challenges

However, incentives alone cannot transform these sectors. Infrastructure remains a significant obstacle. Poor road networks make it difficult for farmers to move crops from rural areas to urban markets, often leading to post-harvest losses. Power supply is also unreliable, forcing manufacturers to depend on costly generators. Without steady electricity, factories cannot operate at full capacity, making local goods less competitive compared to imports.

The government has acknowledged this gap by linking tax incentives to infrastructure development. For instance, private companies that invest in rural roads, warehouses, or off-grid energy solutions may qualify for additional credits. If implemented effectively, this approach could reduce supply chain bottlenecks while improving efficiency across the board.

Job Creation Potential

The employment impact of stronger agriculture and manufacturing industries cannot be overstated. Agriculture, modernized with mechanization and storage facilities, can effectively absorb Nigeria’s large youth population. Manufacturing, with its need for skilled and semi-skilled labour, can complement this by providing stable jobs in urban areas. Together, they can reduce unemployment and underemployment, which remain pressing challenges for the economy.

Moreover, jobs created in these sectors often have multiplier effects. A new food processing plant doesn’t just employ factory workers; it also supports farmers, transporters, packaging suppliers, and retailers. This ripple effect can stimulate local economies and improve living standards across different regions.

Agriculture and manufacturing incentives represent a bold step toward diversifying Nigeria’s investment base. Tax credits, infrastructure-linked policies, and import duty waivers can lower entry barriers and encourage value addition. If backed by better infrastructure, reliable power, and stable policies, these incentives could unlock a new era of industrial growth, job creation, and economic resilience.

Our future cannot rest on oil alone. By empowering agriculture and manufacturing, the country has an opportunity to create a stronger, more diversified economy, one that not only attracts investors but also uplifts its people.