NIGERIA’S high cost of living is not an accident of misfortune. It is the predictable outcome of structural weaknesses that make production expensive, investment risky and the movement of goods uncertain. Unreliable energy raises manufacturing and transport costs, insecurity keeps farmers away from their land, while poor roads, inadequate storage and unpredictable policies increase the cost of doing business. Consequently, producing goods locally is often more expensive than importing them, leaving households to bear the burden through rising prices and declining purchasing power.
Addressing these challenges requires more than temporary subsidies or emergency interventions. It demands a deliberate transition from an economy driven largely by consumption and government spending to one anchored on production, investment, productivity and sustainable job creation.
Oyo State, under Governor Seyi Makinde, offers an illustration of how this transition can begin. His four-pillar agenda for resetting the Nigerian economy, should he emerge as president, positions agriculture as a commercial value chain linking production, processing, storage, financing and markets rather than merely a welfare programme for distributing inputs.
Pillar One hinges on the Economic Reset. ‘Build a productive economy that reduces the structural cost of living, rewards enterprise and improves household prosperity.’
Pillar Two: The Security Reset. ‘Establish a security system that brings responsibility closer to threatened communities and turns credible intelligence into action.’
Pillar Three: The Education Reset. ‘Create an education system that makes learning, capability and opportunity the measure of success.’
Pillar Four: The Socio-Political Reset. ‘Enable a socio-political settlement that protects a basic social floor, restores functional federalism and rebuilds trust in public institutions.’
As usual, critics say it is easier said than done and that there is no want of good policies in Nigeria. What is lacking is implementation and what is rampant is policy inconsistency. To them, Governor Makinde has a simple answer: ‘evidence abounds in Oyo State.’
Fasola: from neglected settlement to investment hub
The clearest demonstration of one of these policy resets is the Fasola Agribusiness Industrial Hub. Once a largely neglected farm settlement, it has become a growing centre for commercial agriculture and agro-industrial activity. This can be replicated across the country.
Its transformation rests on a simple principle: farming cannot thrive in isolation. Producers need roads, processing facilities, technical support, finance and reliable markets.
The state invested in shared infrastructure, established the Oyo State Agribusiness Development Agency to coordinate implementation and opened the area to private operators. The completion of the 65-kilometre Moniya ‘Iseyin Road and reconstruction of the federal Oyo ‘Iseyin Road, which passes through the agricultural corridor, reduced transport barriers and improved the area’s attractiveness to investors.
Available data shows that Fasola has attracted approximately N17 billion in private-sector investment from 14 agribusiness companies involved in crop production, processing, dairy and related services. About 950 hectares are under cultivation, while more than 8,000 smallholder farmers have been integrated into commercial supply chains.
Over 5,000 young people have also received training and access to land, inputs and technical support. The African Development Bank designated Fasola Nigeria first Agricultural Transformation Centre.
The significance of the initiative lies in its institutional approach. Rather than attempting to own and operate every farm or factory, government provides the enabling environment, while private investors contribute capital, technology, expertise and market connections.
The model is being extended across the state. Oyo’s agribusiness investments total approximately ?46.6 billion, alongside nearly $170 million in development funding. According to official records, more than 46,000 smallholder farmers have benefited from support programmes.
The Ijaiye Agribusiness Industrial Hub, backed by the African Development Bank (AfDB), is designed as a larger Special Agro-Industrial Processing Zone expected to accommodate dozens of industries and generate tens of thousands of jobs. Similar hubs are planned for Eruwa and other locations, with investments tailored to their respective economic strengths.
This approach reflects established economic theories. New Economic Geography, associated with Paul Krugman, explains why productive activities tend to concentrate in locations with better access to markets, infrastructure, labour and suppliers. Michael Porter’s Cluster Theory similarly demonstrates how businesses operating within interconnected industrial locations benefit from shared suppliers, skilled workers, knowledge transfer and improved market access.
Comparative advantage reinforces this logic: investments should be located where existing economic conditions support commercial viability, rather than spreading projects primarily for political balance.
The objective is to achieve economies of scale, reduce logistics costs and attract sustainable private capital, avoiding expensive facilities that exist mainly on paper or depend indefinitely on government funding.
For Nigeria, where agricultural productivity remains constrained by fragmented supply chains, inadequate processing capacity and weak infrastructure, the Oyo experience demonstrates how farming can become a foundation for industrial development.
Lowering the cost of production
Replicating this model nationally requires reforms beyond agriculture, particularly in energy. Manufacturers, processors, transporters and small businesses need reliable and affordable power. Where grid supply is inadequate, businesses resort to expensive alternatives, increasing production costs and consumer prices.
Nigeria’s refining history illustrates the consequences of structural inefficiencies. Despite being a major crude oil producer, the country has historically depended on imported refined petroleum products, exposing the economy to foreign-exchange pressures, international price fluctuations and supply disruptions.
According to Makinde, a credible economic reset must confront the commercial and operational realities of government-owned refineries. Rather than committing additional public funds to facilities without clear performance benchmarks, he proposes an independent technical, financial and environmental assessment of each refinery within six months to establish its condition and commercial viability.
Each facility should then be assigned a clear future: engagement of qualified private operating partners, conversion into viable petroleum, petrochemical or logistics assets, or orderly decommissioning where continued operation cannot be justified.
Enforceable milestones should guide the process, with substantial completion within 18 months and production or conversion targets achieved by the end of the third year.
Equally important is a transparent framework for supplying crude oil to domestic refineries. The Petroleum Industry Act provides for a Domestic Crude Supply Obligation, but its effectiveness depends on predictable volumes, commercially reasonable pricing and transparent implementation.
A published domestic netback pricing formula, reflecting international benchmarks adjusted for crude quality and actual delivery costs while excluding export-related expenses not incurred domestically, would improve transparency.
Monthly disclosures should cover required volumes, quantities offered, allocations, deliveries, prices and shortfalls, with defined sanctions for failure to meet obligations.
The objective is not to subsidise inefficiency but to create a predictable environment for domestic refining, strengthen energy security and reduce production costs across the economy.
Integrated value chains and food security
Nigeria’s food system faces similar structural problems. Agricultural interventions have traditionally concentrated on distributing fertiliser, seeds and other inputs, often neglecting the activities required to move produce from farms to consumers.
Higher output does not automatically translate into improved farmer incomes or lower food prices when storage, processing, transportation and market access remain inadequate.
A sustainable strategy must therefore integrate production, storage, processing, transportation, distribution and security. Priority commodities such as rice, maize, cassava, beans and tomatoes require specific development plans addressing land access, inputs, extension services, finance, storage capacity, security and market connections.
The Federal Government’s responsibility should be to establish national standards, provide critical infrastructure, remove regulatory bottlenecks and facilitate partnerships between state governments and private investors. It should not attempt to replace commercial farmers or operate agricultural businesses directly.
Production hubs should be established in locations where existing agricultural output, in infrastructure, market access and private-sector demand make commercial investment viable.
The Fasola experience demonstrates how bringing farmers, processors, infrastructure providers and investors together can transform agriculture into a platform for industrialisation.
Ultimately, the success of agricultural policy should be measured by its ability to increase marketable output, reduce post-harvest losses, improve farmers’ earnings and make food more affordable.
Security as an economic imperative
No agricultural or industrial strategy can succeed where insecurity prevents people from working, investing or moving goods safely.
Attacks on farming communities, kidnapping, banditry and related crimes have forced farmers off their land, disrupted supply chains, increased transportation costs and discouraged investment. The resulting decline in food production contributes to higher prices and weakens rural economies.
Security is therefore not merely a law-enforcement responsibility; it is fundamental to economic development.
Makinde proposes coordinated Security and Economic Recovery Plans for vulnerable communities, bringing together security agencies, state and local governments, agricultural organisations and private operators.
The priorities should include protecting farming communities, major transport corridors, schools, markets and essential infrastructure. Performance should be measured by reductions in attacks and abductions, safer roads, the return of farmers to their land, the reopening of markets and schools, and the restoration of economic activity.
The debate over state policing also deserves attention. Decentralised policing could improve intelligence gathering and response times by enabling security services to understand local threats and community dynamics more effectively.
However, such an arrangement requires clear constitutional responsibilities, professional recruitment and training standards, independent oversight and accountability.
State policing should focus on public safety and crimes within state boundaries, while federal institutions retain responsibility for terrorism, border security, organised crime and cross-border threats. A national framework for intelligence sharing and operational coordination would help prevent duplication, rivalry and political interference.
A defined Threat-to-Action framework should also assign credible threats to a lead institution, identify supporting agencies and establish decision-making authority, timelines and review procedures.
This relationship between security and economic growth is consistent with Institutional Economics, particularly the work of Douglass North, which highlights how strong institutions and the protection of property rights reduce uncertainty and encourage investment.ogenous Growth Theory also reinforces the argument that improved security supports capital formation, entrepreneurship and productivity.
Institutions, fiscal discipline and accountability
The success of an economic reset ultimately depends on the quality of the institutions responsible for implementation.
Nigeria’s federal structure requires clearer responsibilities among federal, state and local governments, matched with the necessary authority, resources and institutional capacity.
Fiscal discipline must remain central. Public borrowing should finance productive investments capable of generating economic returns and identifiable repayment sources rather than recurrent expenditure or projects with limited development impact.
The Central Bank should retain the independence required to pursue price stability, while routine monetary financing of fiscal deficits should be avoided except within clearly defined legal limits. Revenue mobilisation must improve, public expenditure must become more efficient and the debt-service-to-revenue ratio must decline over the medium term.
Transparent budgets, credible implementation schedules, regular reporting and consequences for missed targets are equally important.
Development projects should be assessed against measurable outcomes, including food and transport inflation, real household consumption and earnings, freight costs along major corridors, marketable agricultural output, post-harvest losses, domestic crude deliveries, refinery performance, electricity supply hours, metering progress, private investment mobilised and sustainable jobs created.
The emphasis must shift from money spent and contracts awarded to tangible economic and social results. An agricultural hub succeeds when farmers access markets, products are processed, private investment is attracted and employment is sustained. Similarly, a road delivers value when it reduces travel time and transportation costs while improving the movement of goods.
A shared responsibility
Government has the primary responsibility of protecting lives and property, deploying public resources responsibly, explaining policy decisions and publishing implementation results. Citizens, in turn, must participate in democratic processes, obey lawful regulations, pay legitimate taxes and hold public officials accountable.
Businesses require stable and predictable policies, fair competition and protection from arbitrary government actions. They must also compete through efficiency, innovation and productivity rather than political connections.
‘Sustainable growth cannot be achieved through government spending alone. It requires a productive private sector supported by credible institutions and a population able to seize economic opportunities,’ according to Makinde.
Oyo’s experience provides a useful starting point for a broader national conversation. The transformation of Fasola demonstrates how targeted public investment, infrastructure development and private-sector participation can stimulate economic activity beyond the immediate beneficiaries of government programmes.
Monthly internally generated revenue rose from ¦1.7 billion to ¦8.7 billion, alongside investment reforms, industrial hubs, airport upgrades and expanded economic opportunities.
His words: ‘As Governor of Oyo State, I have learnt that a government produces better results when it begins with the real problem, connects policy to delivery and remains willing to correct what is not working. For example, roads should not be built as isolated projects; they should connect people, farms, Businesses and markets. Education should not be judged only by enrollment or buildings; it should be judged by what learners can do. Security requires personnel and equipment, but it also requires local knowledge, functioning communications and clear responsibility.’
The integration of thousands of smallholder farmers into commercial supply chains, attraction of private capital and training of young people illustrate the potential of treating agriculture as a business rather than merely a social intervention.
However, scaling the model nationally requires consistency, institutional discipline and recognition of the different economic strengths of Nigeria’s states. Not every state can replicate Fasola in exactly the same form. Some have stronger advantages in livestock, fisheries, horticulture or agro-processing.
What matters is the underlying principle: identify local opportunities, remove infrastructure and regulatory constraints, mobilise private investment, protect productive activities and measure success through economic outcomes.
The goal is an economy where farmers can cultivate their land without fear, manufacturers have access to affordable energy, businesses move goods efficiently, investors operate under predictable rules and workers earn incomes that improve their living standards.
Oyo’s experience suggests that this pathway is achievable when government concentrates on enabling production rather than controlling every aspect of economic activity.
The challenge is to extend that discipline beyond individual projects and states by building a national framework anchored on productivity, transparency, security and accountability.
Ultimately, success will not be measured by the number of policies announced or projects commissioned, but by whether Nigerians can produce more, earn better incomes, move goods at lower costs and afford a better quality of life.