Why 90% of Nigerian agritech startups fail

When I first started Aké Collective, I wanted to do agritech. The plan was to send drones into rural communities to provide climate data. When I did a small trial and explained the concept to a farming community, the response was blunt: “We’re not interested.” What they said next was even more instructive: “Ma, we want empowerment.” My assistant later clarified what that meant. Empowerment means cash.

That moment was not just a personal wake-up call. It was a microcosm of why Nigeria’s agritech sector, despite hosting over 230 startups and raising $150 million between 2023 and 2025, has a failure rate of approximately 90% within five years. The disconnect between what founders are building and what farmers actually need is not a communication problem. It is a structural mismatch with serious economic consequences.

The scale of the misalignment

Nigeria has 73 million hectares of arable land, and agriculture contributes 24% to GDP. On paper, the sector should be a magnet for tech-enabled solutions. In practice, most agritech ventures are replicating business models designed for large-scale mechanised farms in North America and Europe, then attempting to deploy them in an environment where 81% of farmers operate at the subsistence level on fragmented plots of less than two hectares.

The infrastructure gap alone is prohibitive. Rural internet coverage sits below 30%. Agricultural extension services operate at a ratio of 1 officer to 3,000 farmers, when the international standard is closer to 1 to 50. Power supply remains erratic, and road infrastructure inflates logistics costs by 30% to 50% compared to regional peers. These are not minor obstacles. They are fundamental constraints that render most digital-first solutions impractical at scale.

The funding model compounds the problem. Venture capital follows hype, not fundamentals. Agritech startups chase scale before profitability, absorbing losses per transaction on the assumption that volume will eventually correct their unit economics. It does not. When seed funding dries up, as it invariably does, these ventures collapse because they have built no sustainable revenue base. The crowdfunding boom that briefly looked promising during the pandemic era collapsed when unverified farms failed to deliver, eroding trust across the sector.

The regulatory and governance gap

Policy inconsistency is a known constraint across Nigerian industries, but agriculture faces a particularly acute version of this problem. The Anchor Borrowers’ Programme, which promised inputs and 9% interest rates, should have been a lifeline for smallholders. Instead, weak monitoring and political interference resulted in loan recovery rates of just 24%, according to IMF data. Farmers defaulted due to floods, insecurity, and a lack of follow-through on promised support, but the programme’s design flaws were evident from the start.

More recently, sudden regulatory shifts have destabilised adjacent sectors. SEC rules on digital finance and EFCC probes into remittances have sunk fintech-agritech hybrids that were attempting to bundle credit with agricultural inputs. Founders often treat compliance as an afterthought, building first and worrying about regulation later. When enforcement comes, it is swift and unforgiving.

The broader governance failure is more insidious. Land tenure insecurity discourages long-term investments. Communal land systems mean farmers are often working plots they do not own, which makes it irrational for them to invest in irrigation or soil improvement. Extension services, where they exist, are under-resourced and politically captured. The result is an agricultural sector that operates in a low-trust, high-friction environment where formal systems are viewed with scepticism.

What the market actually demands

The preference for cash over technology is not anti-progress. It is economically rational. Financial autonomy provides rural households with the freedom to meet essential needs without constant anxiety about tomorrow. When farmers say they want empowerment, they are articulating a clear demand: market access, fair pricing, and a value chain where they are not the ones being squeezed.

Technology can serve that goal, but only when it is designed around the farmer’s constraints, not the founder’s assumptions. Solutions that work integrate training, simplicity, and direct buyer linkages. They solve immediate, visible problems. They generate income today, not promises for a future harvest. West African fintech-agritech hybrids have shown some success by bundling credit with inputs and embedding extension services, but even these models struggle with scale because the underlying infrastructure and governance gaps remain unresolved.

The successful models share common characteristics. They are offline-first because connectivity is unreliable. They require minimal digital literacy. They provide tangible economic benefit within a single harvest cycle. Most importantly, they recognise that subsistence farmers cannot afford to experiment. Risk tolerance is near zero when a bad season means your children do not eat.

The path forward

The agritech sector’s high failure rate is a symptom of a larger problem: a disconnect between the innovation ecosystem and the economic realities of smallholder agriculture. Fixing this requires more than better founders or smarter capital. It requires a fundamental recalibration of what success looks like.

For investors, this means patience. Agriculture operates on biological timelines, not software cycles. Expecting rapid scale in a sector constrained by infrastructure, land tenure insecurity, and policy volatility is irrational. The winners will be those who build sustainable unit economics from day one, not those who chase vanity metrics.

For policymakers, this means recognising that agritech cannot compensate for broken fundamentals. Extension services need investment. Land tenure reform is long overdue. Rural infrastructure, particularly power and roads, is not a nice-to-have. It is the foundation on which any technology-enabled agriculture must be built.

For founders, this means listening. The community that rejected my drones was not difficult. They were being clear. They wanted something that makes them money. Everything else, no matter how sophisticated, is noise.

The Nigerian agritech sector will not reach its potential until it stops building solutions in search of problems and starts solving the problems farmers actually have. That shift requires humility, patience, and a willingness to acknowledge that in an agrarian economy, the best technology is often the one that puts cash in a farmer’s hand today.

About the author:

Cobi-Jane Akinrele is the founder of Aké Collective, working with over 1,000 smallholder farmers in Nigeria’s highland states (Plateau, Bauchi, and Taraba) to build traceable, EUDR-compliant supply chains for soy, coffee, and fonio. Born in the UK with Nigerian roots, she studied at Cambridge and holds a master’s in African Studies. She writes about supply chains, compliance, and the realities of building food systems from the inside in her newsletter, Highland Lens.