A central puzzle that baffles many Nigerians today is how a nation so richly endowed with natural resources can remain trapped in pervasive poverty.

Nigeria should not be poor. Yet, the data paint a grim picture: 63 per cent of our population, about 133 million people, are multidimensionally poor. The burden is heavier in rural areas, where 72 per cent live in poverty, compared to 42 per cent in urban zones.

Poverty is also mirrored in our deepening food insecurity. While insecurity disrupts farming, the more fundamental cause lies in Nigeria’s weak production capacity. Without modern production systems, citizens cannot access sufficient, safe, and nutritious food. Climate change only worsens this vulnerability, reducing yields and threatening livelihoods.

The larger question is why, despite repeated “reforms”, Nigeria’s economy has failed to generate inclusive, job-creating growth. The answer lies in our overreliance on neo-liberal economic prescriptions that prize macroeconomic stability but neglect production. Stability is necessary, but it is not sufficient. Real, sustainable growth stems from manufacturing, the engine of transformation.

Macroeconomic programmes manage inflation, exchange rates, and debt, but they do not build factories or generate productive jobs. Three structural weaknesses define this model. First, it is short-term and stabilisation-oriented rather than focused on building a resilient, knowledge-driven production base.

Second, it promotes financialisation, a situation where speculative finance overshadows real economic investment in agriculture and industry. Third, premature trade liberalisation exposed our fragile industries to global competition, leading to deindustrialisation, factory closures, and job losses.

Experience shows that trade liberalisation alone does not drive development. Successful economies are built on deliberate, context-specific industrial strategies. Nigeria’s policymakers must therefore understand that macro-stability, while necessary, cannot substitute for structural transformation. Excessive faith in market forces and the private sector, without state-led strategic coordination, will not lift millions out of poverty.

Domestic governance weaknesses also deepen the problem. Inefficient bureaucracy, poorly executed reforms, and institutional fragility waste potential. Decades of reliance on primary commodity exports, crude oil, cocoa, and cashew have left Nigeria vulnerable to declining terms of trade. For instance, Ogbomosho’s famed cashew is exported raw, while processing and value addition occur abroad.

Globally, the cashew market is growing at about 4.5 per cent annually, with sales projected to hit $11 billion by 2030. Yet, 80 per cent of processing is concentrated in just two countries, India and Vietnam. West Africa grows half of the world’s cashew but processes only five per cent. The result is a massive loss of value, jobs, income, and opportunities that should benefit local communities.

In contrast, Vietnam’s processed agricultural exports reached $62.5 billion in 2024, with cashew alone accounting for $4 billion. Nigeria’s total agricultural exports stood at roughly $3 billion. The gap is a production gap, one that reflects our underinvestment in processing, technology, and infrastructure.

To compete globally, Nigeria must upgrade productivity, replace aging tree stocks, expand access to machinery and financing, and fix rural infrastructure. Global markets are rarely friendly to African products, and tariff escalation penalizes processed exports from developing countries. The African Continental Free Trade Area (AfCFTA) offers a chance to reverse this by promoting regional value chains.

Protectionist shifts, such as the United States’ 46 per cent tariff on Vietnamese cashews, create new openings for Nigeria but only if we have the capacity to process locally. A production-led trade policy, not blind liberalisation, is the route to sustainable growth.

Agricultural productivity remains central to poverty reduction since most of Nigeria’s poor live in rural areas. If we aspire to structural transformation, a shift from instability to sustainable, inclusive growth, we must invest in productive infrastructure that supports manufacturing and modernised agriculture.

Nigeria spends about $10 billion annually on food imports, including $3 billion on cereals. This is paradoxical for a nation with 84 million hectares of arable land, 230 billion cubic meters of water, and abundant rainfall across most of its territory. Our problem is not resources; it is production.

Once we unleash productive agriculture and industry, we will end what I call poverty accommodation, the passive acceptance of scarcity as normal. Education and technical training must empower rural producers with the knowledge to add value to their output. The Ogbomosho cashew farmer, for example, must understand that cashew is not just a nut, it yields derivatives like cashew nutshell liquid and cashew apple juice, both valuable in global markets.

Rural transformation is the key to economic transformation. The rural poor lack savings, credit, infrastructure, and markets. Agrarian economies remain stagnant because their small, fragmented markets cannot sustain production. Insecurity, poor governance, and lack of logistics amplify the problem. Without market demand, there can be no sustained supply.

To break this cycle, Nigeria must transition from an agrarian to a modern industrial system. The Special Agro-Industrial Processing Zone (SAPZ) initiative represents a bold attempt to do so. SAPZs cluster farms and firms within defined zones, linking agriculture to manufacturing and logistics. Such clusters have transformed Asia; China alone hosts more than 2,500 special economic zones, fueling decades of high growth.

Our rural economy, by contrast, is defined by mass poverty. The SAPZ framework can reverse this by industrialising the countryside, creating jobs, and expanding opportunity. The Ogbomosho Special Agro-Industrial Zone, for instance, should anchor local transformation. Complementary social protection systems, productivity schemes, and cooperative financing can enhance resilience and inclusion.

We must invest in roads, communications, irrigation, and processing technologies. Credit enhancement, risk guarantees, and access to modern machinery will allow small producers to scale. Rural cooperatives and microfinance institutions can mobilise savings, facilitate trade, and build productive capacity.

Leadership and accountability are critical. China’s success in eradicating extreme poverty in 2021 underscores what focused industrial policy can achieve. By industrialising its rural areas and promoting light manufacturing, China absorbed millions of surplus farm workers, raised incomes, and sustained 8–10 per cent growth for decades.

Nigeria can do the same. But we must restore political stability, invest in education and skills, and build infrastructure that supports production. Peri-urban centers like Ogbomosho can become hubs of light industry and agro-processing.

We must become a production, not a consumption nation. Production is the battle axe to break the poverty equilibrium, the surest path to mass employment, rising incomes, and shared prosperity.

Oyelaran-Oyeyinka is the Senior Special Adviser to the President on Industrialisation, African Development Bank Group.