Nigeria accelerates drive to meet soaring domestic wheat demand

NIGERIA – Federal authorities and agricultural stakeholders across Nigeria are expanding direct interventions to boost domestic wheat production as rapidly growing consumption continues to widen the gap between local supply and demand.

Wheat is a critical input for Nigeria’s food industry, particularly for bread, pasta, and confectionery products, making stable supply and affordable pricing essential for food security and inflation management.

However, domestic harvests currently cover only a fraction of the total market demand, resulting in substantial foreign exchange outlays for commercial grain imports.

Although reports indicate Nigeria’s wheat production has nearly doubled since 2020, the country’s consumption is said to have risen by more than 45%, as have wheat imports to meet domestic market demand.

Wheat production in Nigeria’s key growing regions of Kano, Borno, Bauchi, Yobe, Zamfra and Jigawa is projected to reach 140,000 tonnes for the 2026/27 marketing year, a 7% increase from last year’s output. However, demand is projected at more than 6.8 million tonnes, which the US Department of Agriculture’s Foreign Agricultural Service (USDA FAS) predicts will be met by an increase in imports to 7.2 million tonnes. Projected imports this year are nearly 500,000 tonnes more than in 2025-26.

Nigeria’s production is expected to increase by at least 10,000 tonnes year on year in 2026/27, compared to an estimated consumption demand of 400,000 tonnes during the period.

During the last 10 years, the government, through the Ministry of Agriculture and Food Security, has attempted to reduce the wheat import bill by at least 50% and increase wheat yield per acre.

Reducing wheat production costs

In some instances, the Nigerian government has worked with wheat milling companies and regional agencies such as the African Development Bank (AfDB) to cut wheat production costs and increase earnings for local producers, reducing dependence on imports and meeting domestic consumption demand.

For example, the West African country, with a population of more than 220 million people and annual per capita wheat consumption of 25 kg, has been implementing the National Agricultural Growth Support Scheme – Agro-Pocket (NAGS-AP), a multi-million-dollar agricultural scheme financed by AfDB to increase production of its key agricultural grains, including wheat. The project is expected to increase output by an additional 3.2 million annually and enhance farm yields to 6 tonnes per hectare by 2027.

Through the NAGS-AP initiative, which is implemented by the Ministry of Agriculture and Food Security in partnership with the Ministry of Finance, through the NAGS-AP national project secretariat, Nigerian wheat farmers get a 25% and 50% subsidy on seeds and fertilizers, respectively. They also receive access to extension services, agricultural insurance, credit facilities, climate-smart technologies, and digital platforms for their operations. 

Although AfDB said the project is independently monitored and assessed, including through farmers’ surveys by the National Agricultural Extension and Research Liaison Services and remote sensing and satellite mapping of the total area under wheat cultivation, organizations such as ActionAid Nigeria have raised concerns about transparency in its implementation.

The AfDB said Nigeria’s wheat cultivation increased from 11,820 hectares in 2021 to nearly 400,000 hectares by 2025, and yields increased by 30%, pushing up the country’s domestic wheat production from less than 1% of national demand to 20%, about 1.12 million tonnes, worth over US$500 million.

But according to ActionAid Nigeria, the project, though well-intentioned, needs “far more evidence-based assessment to distinguish verified outcomes from competing claims.”

Ms. Suwaiba Muhammad-Dankabo, the organization’s deputy country director, said the program has limited data transparency, “raising concerns about overall effectiveness, inclusiveness and accountability of the program.”

Agriculture Minister Abubakar Kyari described the program as a strategic step toward “all-year-round farming and self-sufficiency in wheat production,” citing recent expansion into states such as Cross River as evidence of growing geographic diversification.

Both the ministry and AfDB said at least 25,000 jobs have been created, with an estimated US$30 million injected into Nigeria’s wheat market through private investments as wheat milling companies rolled out guaranteed purchase agreements with farmer cooperatives, giving farmers “reliable markets as the use of digital systems cut through the distribution problems that had held things back for decades.”

Impacts of climate change

Through the NAGS-AP project, Nigeria has tried to mitigate climate change impacts, such as increasing desertification, by importing and distributing heat-tolerant wheat seed from Mexico that is adapted to the country’s West African climate.

One example of how Nigeria has been impacted by climate change is the falling water levels in Lake Chad basin, a key water source in the key producing areas to the northwest. This prompted the government to include heat-tolerant wheat seeds in the national supply chain.

Separately, the Central Bank of Nigeria has continued to back wheat farmers through its Anchor Borrowers Programme, a credit scheme aimed at boosting agricultural output and reducing food import dependence, while the government has worked with milling companies and regional agencies to lower production costs and raise farmer earnings.

In 2015, CBN included wheat in the list of commodities eligible for the APB scheme, under which wheat producers deliver their harvest to wheat millers for cash credited to farmers’ accounts.

Meanwhile, CBN provides financing through the Micro, Small and Medium Enterprise Development Fund at a 9% interest rate and coordinates the entire program while serving as the secretariat, according to official reports.

Some partners in the implementation of APB include Nigeria Incentive-based Risk Sharing for Agricultural Lending, which provides technical assistance, and the Nigerian Agricultural Insurance Corporation, which provides insurance coverage.

The bank said including wheat in the ABP program is meant to facilitate import substitution, eliminate dependence on imported wheat, and promote self-sufficiency in Nigeria’s wheat value chain by financing domestic wheat production and strengthening the integration of wheat farming with Nigeria’s cereal grain millers.

It said the strategy includes “eliminating importation of wheat by financing local wheat production and facilitating offtake, ensuring availability of high-yield seeds by financing seed multiplication and the establishment of seed ripple centers, expanding land under cultivation for wheat to meet the nation’s total demand, and pursuing collaboration with key stakeholders in the wheat value chain for sustainability of local production.”

CBN has also been working with the Flour Millers Association of Nigeria (FMAN) and Wheat Farmers Association of Nigeria (WFAN) to promote local wheat production through the state-driven backward integration policy, which encourages flour milling companies to invest in backward integration, such as investing in wheat production, as a business diversifying strategy to reduce reliance on imports. 

The partnership was formed in response to flour millers’ concerns about market challenges such as foreign exchange scarcity and currency devaluation, which increase production costs despite the government-backed backward integration policy encouraging importing millers in Nigeria to support domestic wheat production.

Despite the push to expand local wheat production, Nigeria still depends on foreign markets for up to 98% of its domestic wheat demand, with Canada, Australia, Russia, the United States, and Black Sea countries as the key suppliers.

Flour millers, especially the country’s five largest companies, which hold a combined 96% stake in Nigeria’s milling industry, blend low-priced wheat imports with high-quality supplies to reduce flour prices.

Trade challenges

Nigeria’s dependence on wheat imports, especially from Russia and Ukraine, was tested when the global wheat market was disrupted by the conflict between the two countries a few years ago. Russia’s invasion of Ukraine pushed Nigeria’s long-held desire to revamp local production to the top of the agenda, including the on-and-off use of protective trade policies such as import tariffs and incentives for domestic wheat farming.

For instance, Nigeria has been imposing a 5% import tariff on wheat plus a 15% levy, which it said goes to the national wheat development program. Trade-restrictive measures, though meant to encourage domestic wheat production, have at times been seen as constraints on the growth of the Nigerian wheat market, as they increase production costs and drive up prices for staples such as bread, semolina, pasta, and other wheat flour-based products.

Furthermore, Nigeria is still grappling with insecurity in some of the wheat-producing regions, especially in the north, where military operations by the Islamic group Boko Haram have hampered effective farming activities, constraining the availability of locally sourced wheat.

To achieve this ambitious goal for the country’s wheat market, the government will need to execute these stated goals, starting with concrete steps to address insecurity in the north, the high cost of farm inputs and having a stable fiscal and trade policy in place for the long term.

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