FG targets cooperatives as financing, value chain engine in agriculture reset

The Federal Ministry of Agriculture and Food Security has rolled out a sweeping reform programme for Nigeria’s cooperative sector, positioning it as a central lever for improving agricultural productivity, expanding rural finance, and reducing food import dependence.

The reforms, unveiled at the 8th National Council on Cooperative Affairs in Abuja, are structured to transform cooperatives from largely informal associations into commercially viable entities integrated into structured agribusiness value chains.

Aliyu Sabi Abdullahi, minister of state for agriculture and food security, said the initiative reflects a policy shift toward using cooperatives as aggregation platforms for production, processing, and market access.

He noted that weak governance structures, limited access to credit, and poor integration into formal markets have constrained the sector’s potential, despite its reach across farming communities.

At the core of the reform is the Renewed Hope Cooperative Reform and Revamp Programme, a framework designed to modernize operations, strengthen institutional capacity, and unlock scale efficiencies within the cooperative ecosystem.

From a business standpoint, the programme introduces enterprise-focused interventions, including the development of localized processing hubs, cooperative farming clusters, and shared mechanization services. These are expected to reduce post-harvest losses, improve value addition, and enhance margins for smallholder farmers.

A key pillar of the reform is the planned establishment of a Cooperative Bank of Nigeria, aimed at addressing long-standing financing gaps in the rural economy. Analysts say this could significantly improve access to affordable credit for farmers, agro-processors, and micro-enterprises that remain excluded from traditional banking systems.

The government also plans to deploy a national Cooperative Smart Registry alongside a Cooperative Verification Number system, a move expected to improve data integrity, traceability, and transparency across the sector. This is seen as critical to attracting private capital and enabling cooperatives to participate in formal supply chains.

Industry stakeholders note that improved data and governance standards could reduce counterparty risk for lenders and off-takers, making cooperatives more bankable and investment-ready.

Marcus Olaniyi Ogunbiyi, permanent secretary at the ministry, said the reform package includes capacity building for cooperative leadership, harmonized accounting standards, and stronger regulatory oversight to improve accountability and investor confidence.

He added that cooperatives remain essential vehicles for mobilising farmers, youth, and women, particularly in underserved rural economies where access to finance and markets is limited.

Hannatu Mershak, president of the Cooperative Federation of Nigeria, said the reforms could strengthen the role of cooperatives as engines of grassroots economic development.

She noted that beyond agriculture, cooperatives serve as critical channels for financial inclusion, employment generation, and community resilience.

For investors and agribusiness operators, the reform signals a more structured approach to aggregation and supply chain coordination, potentially lowering transaction costs and improving consistency in raw material sourcing.

Stakeholders say if effectively implemented, the cooperative overhaul could enhance productivity across key value chains, support import substitution, and position agriculture as a more scalable and commercially attractive sector within Nigeria’s economy.