High Interest Rates Put Nigerian Agro-Exporters at a Disadvantage — Expert

May 4, 2026

4:26 PM WAT

An agricultural sector expert, Ademola Adesokan, has identified high borrowing costs, weak infrastructure, and post-harvest inefficiencies as key factors undermining Nigeria’s competitiveness in global commodity markets.


Adesokan said that despite the country’s vast agricultural potential, structural constraints continue to limit the ability of Nigerian exporters to compete with leading producers worldwide.


Speaking with VIP News, the National President of the National Cashew Association of Nigeria noted that agro-exporters in Nigeria face significant financing disadvantages compared to their counterparts in countries such as Côte d’Ivoire, Vietnam, and India, where access to affordable credit and efficient export systems gives producers a competitive edge.


He explained that although Nigeria holds comparative advantages in commodities such as cashew, shea, cocoa, sesame, soya, and groundnut, most farmers operate at subsistence levels, limiting production scale and export competitiveness.


According to him, the high cost of borrowing remains a major constraint, with Nigerian exporters typically accessing loans at double-digit interest rates, compared to three to four percent in competing countries. This gap, he said, significantly erodes export margins and weakens Nigeria’s appeal to premium international buyers.


Adesokan also highlighted poor post-harvest handling and port inefficiencies as major contributors to declining product quality and rising rejection rates in international markets. Inadequate drying facilities, poor storage conditions, and prolonged port delays, he said, often result in Nigerian commodities failing to meet required standards upon arrival.


“These challenges continue to damage Nigeria’s reputation as a reliable export origin, despite its strong agricultural base,” he noted.


However, he expressed optimism over reforms under the Nigeria Industrial Policy 2025, being implemented by President Bola Ahmed Tinubu’s administration and coordinated at the commodity level by the Minister of State for Industry, John Owan Enoh.


He said the policy aims to tackle commodity-specific constraints through targeted industrial strategies, improved quality standards, and enhanced traceability systems for agricultural exports.


“Our challenges are structural, not agricultural,” Adesokan added. “The sector is dominated by smallholder farmers operating at the subsistence level, limiting economies of scale needed to compete globally.


“Nigerian exporters borrow at punishing double-digit rates, while competitors access credit at three to four per cent. That gap alone weakens our competitiveness before products even leave the farm.


“The situation is worsened by post-harvest losses and port inefficiencies, which are particularly damaging for time-sensitive commodities.”


He emphasized that while Nigeria’s potential has long been evident, the missing link has been the institutional coordination required to build a globally competitive supply chain.

“That window is now opening, and sector associations are ready to take advantage of it,” he concluded.

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