For a country that boasts over 70 million hectares of arable land, more than 200 million citizens, vast sunshine belts, solid minerals in commercial quantities, and a youthful population eager to work, Nigeria’s rising food inflation has become both an economic paradox and a national embarrassment.
In January 2026, Nigeria’s headline inflation hovered above 29 percent, while food inflation crossed the 33 percent mark in several states. A kilogram of onions that sold for less than N300 in 2021 now goes for between N1,200 and N1,800 in Lagos and Abuja markets. Tomatoes, rice, beans, yams and even garri, once regarded as ‘poor man’s food’, have become luxury items for millions of households.
“Domestic tourism alone could generate millions of jobs across transportation, hospitality, retail and entertainment if properly developed. But this requires security reform, infrastructure investment and deliberate marketing strategies.”
This is not merely a supply chain issue but the inevitable outcome of decades of policy laziness, intellectual rigidity, and mono-economic policies.
Nigeria’s economic dilemma did not begin today. It began in 1956 with the discovery of oil in Oloibiri, Bayelsa State, and worsened during the oil boom of the 1970s, when petrodollars replaced productivity as the foundation of national planning. Agriculture, which once accounted for over 60 percent of GDP and employed more than 70 percent of Nigerians, was abandoned for crude oil exports that today contribute less than 10 percent to GDP but still provide over 75 percent of foreign exchange earnings.
In the years Nigeria doubled down on oil dependency, nations such as Malaysia, Indonesia and the United Arab Emirates were quietly building diversified economies. Malaysia took palm seedlings from Nigeria in the 1960s and is today one of the world’s largest exporters of palm oil-based products, from cosmetics to biodiesel. The UAE invested oil windfalls into aviation, tourism and real estate, transforming Dubai into a global service hub. By contrast, Nigeria invested largely in consumption.
The implications are now evident. When global oil prices crash, as they did in 2016 and again in 2020, the naira weakens, foreign reserves shrink, inflation spikes and food becomes scarce. Worse still, Nigeria now spends over $10 billion yearly on food imports, including items that can be grown locally such as wheat, sugar, dairy and fish.
Diversification must go beyond agriculture alone. It must begin with the diversification of ideas and thinking within government and policy circles.
Take tourism, for instance: Nigeria earns less than $2 billion yearly from tourism compared with Morocco’s over $10 billion or Egypt’s $13 billion. This is despite the presence of globally competitive attractions such as Obudu Mountain Resort, Yankari Game Reserve, Erin Ijesha Waterfalls, Nike Art Gallery, and Osun-Osogbo Sacred Grove, a UNESCO World Heritage Site.
Domestic tourism alone could generate millions of jobs across transportation, hospitality, retail and entertainment if properly developed. But this requires security reform, infrastructure investment and deliberate marketing strategies.
Then there is renewable energy, as Nigeria receives an average solar radiation of 5.5 kWh/m² daily, one of the highest in the world, yet generates less than 10 per cent of its electricity from renewable sources. Meanwhile, nations like India have installed over 70 gigawatts of solar capacity through aggressive policy support and private sector partnerships.
If Nigeria were to deploy decentralised solar mini-grids across rural communities in states like Sokoto, Borno, Katsina and Niger, pressure on the national grid would reduce significantly, freeing up energy capacity for manufacturing clusters in Lagos, Ogun, Anambra and Kano.
Equally important is value addition to agricultural exports, as Nigeria remains one of the world’s largest producers of cassava, cocoa and sesame seeds, yet exports most of them in raw form. Cocoa processed into chocolate fetches up to four times the price of raw beans in international markets. Cassava can be converted into ethanol, starch and industrial adhesives, while sesame oil commands premium prices globally.
Malaysia’s use of rubberwood to manufacture export-grade furniture offers a clear lesson, as raw material export is the fastest route to economic stagnation.
Housing is another sector crying out for innovative thinking. China’s extensive use of locally sourced materials such as limestone, laterite and compressed earth blocks has reduced construction costs dramatically while creating thousands of jobs in local supply chains. Nigeria’s solid mineral reserves, including gypsum, kaolin and limestone, can similarly power a local building materials industry capable of addressing the country’s 28 million housing deficit.
But diversification will not happen by wishful thinking but requires political courage to redirect resources from entrenched interests benefiting from oil rents toward sectors whose gains may only become evident in the long term. As Niccolò Machiavelli warned centuries ago, reform is difficult precisely because it threatens established privilege while empowering future generations who have no voice today.
The way forward must therefore include institutional reforms that reward innovation, decentralise economic planning, and incentivise private sector investment in non-oil sectors. Special economic zones focused on agro-processing, renewable energy manufacturing and tourism infrastructure could become catalysts for job creation if backed by stable policies and transparent governance.
Nigeria’s challenge is no longer about scarcity of resources; it is about scarcity of imagination. Until policymakers begin to diversify not just the economy but also their ideas, strategies and assumptions, the nation may continue to sit atop vast wealth while its citizens struggle to afford a bag of onions.
Economic diversification is not an option. It is Nigeria’s last remaining insurance policy against an uncertain future.
