The story usually told is that Nigerians 'forgot about agriculture' when oil came. The economic story is more precise: oil revenue inflated the Naira, the Naira-overvalued price of imported food fell below the cost of domestic production, and the Marketing Boards (which had paid farmers below the world price to fund colonial and post-colonial development) collapsed under the contradiction. This is the classical 'Dutch Disease' — first diagnosed in the Netherlands after the 1959 Groningen gas discovery — and Nigeria is one of its most extensively documented victims.
The before-and-after figures are stark. In 1960, agriculture contributed 64 percent of GDP and employed about 70 percent of the workforce. Nigeria was the world's largest exporter of palm oil (43% of world output), the second-largest exporter of cocoa and groundnut, a major exporter of rubber, cotton and palm kernels. Food imports were 3 percent of total imports. By 1980 — fifteen years into the oil boom — agriculture was 28 percent of GDP; palm oil exports had collapsed from over 150,000 tonnes a year to almost zero; the groundnut pyramids of Kano had disappeared; and food imports were 22 percent of total imports.
The mechanism was the exchange rate. The 1972 Indigenisation Decree and the 1973 oil shock together pushed federal oil receipts from about 26 percent of revenue in 1970 to 81 percent by 1974, and the Naira appreciated sharply (officially £1 = ₦1.27 in 1973, falling to £1 = ₦0.65 by 1981). At that exchange rate, Malaysian palm oil delivered to Apapa was 40 percent cheaper than Edo palm oil delivered to Lagos. The Marketing Boards — which had paid Nigerian farmers below the world price and pocketed the difference for development spending — could not now sell at a profit, and the 1977 abolition of the Boards removed the only buyer of last resort that had kept the export crops moving.
Four subsequent attempts to revive agriculture all failed structurally:
- Obasanjo I's Operation Feed the Nation (1976) — distributed seedlings, never tackled the exchange rate.
- Shagari's Green Revolution (1980) — same diagnosis, same failure.
- Obasanjo II's NEEDS Agricultural Programme (2003) — modest dent in rice imports.
- Buhari II's Rice Import Ban (2015–2019) — produced a domestic price spike, mass smuggling from Cotonou, and ultimately did not lift production sustainably.
What works structurally — a competitive exchange rate combined with predictable producer prices — has never been politically attempted, because it would mean a devaluation more aggressive than 1986 SAP or 2023 Tinubu. The Dutch Disease diagnosis is now 50 years old in Nigeria. The disease is the policy. See also Structural Adjustment, Naira devaluations.
Figure 1
Agriculture as a share of GDP and exports, 1960–2024
In 1960 agriculture was 83% of exports. By 1980 it was below 3%. The collapse is the same shape as the rise of oil.