Can Nigeria’s G2P Card Fix the Gaps in Agricultural Funding and Input Distribution?

For decades, Nigerian farmers have struggled with delays and inefficiencies in accessing essential inputs like fertilizers and seeds. In many regions, promised supplies arrive late or at inflated prices, forcing farmers to seek costly alternatives. These challenges drive up costs, reduce yields, and create uncertainty in the agricultural sector. Despite multiple intervention programs, inefficiencies persist, limiting productivity and food security. Farmers continue to grapple with corruption, poor coordination, and exclusion from subsidy programs. Smallholder farmers, the backbone of Nigeria’s agriculture often bear the brunt of these failures, as resources meant for them are misallocated or delayed. A system that ensures timely, transparent, and affordable input distribution is critical. The G2P card, a digital payment system designed to streamline government-to-person transfers, offers a potential solution. If implemented correctly, it could address longstanding issues of fraud, misallocation, and financial exclusion giving farmers direct access to the support they need to thrive.

Understanding Nigeria’s G2P Card System

Nigeria’s agricultural subsidy programs have long been plagued by inefficiencies, corruption, and exclusion. Farmers who should receive direct support often face delays, misallocations, and fraud, while intermediaries exploit gaps in the system. Many genuine farmers remain excluded due to flawed verification processes, while funds sometimes end up in the hands of non-existent beneficiaries or politically connected individuals. The G2P card is designed to address these challenges head-on by ensuring that only verified farmers receive direct financial support. Linked to the National Identity Number (NIN), the card uses biometric verification to authenticate recipients, eliminating ghost beneficiaries and fraud. It also enables seamless, direct transactions, reducing delays and ensuring timely disbursement of subsidies. Another key advantage is financial inclusion. Many rural farmers lack access to formal banking systems, limiting their ability to receive funds securely. The G2P card addresses this by allowing offline transactions, ensuring that even farmers in remote areas can benefit. Global examples highlight the potential impact of digital subsidy systems. India’s Direct Benefit Transfer (DBT) program eliminated subsidy leakages by depositing funds directly into beneficiaries' accounts. Brazil’s Bolsa Familia digitized welfare payments, improving efficiency and reducing poverty. Kenya’s M-Pesa expanded financial inclusion through mobile transactions, facilitating government payments. If properly executed, Nigeria’s G2P card could bring similar benefits—ensuring government support reaches those who need it most and strengthening the agricultural sector. However, success depends on effective implementation, strong monitoring mechanisms, and farmer adoption.

The Struggles of Agricultural Funding in Nigeria

For many Nigerian farmers, accessing credit remains a major challenge. Despite agriculture being a key driver of the economy employing nearly 70% of households, financial support is scarce. Traditional banks demand collateral that most smallholder farmers simply do not have land titles, fixed assets, or large cash deposits. Even alternative schemes, such as the National Collateral Registry (NCR), which allows farmers to use movable assets like equipment and livestock as security, have done little to close the financing gap. A National Bureau of Statistics (NBS) report revealed that only 7% of farming communities received micro-credits from banks in 2022, while just 11% had access to loans. The situation is even worse in rural areas, where bureaucratic loan application processes and high interest rates discourage farmers from seeking formal financing. Geographic disparities also deepen the problem. While Lagos and Ogun states recorded the highest access rates 26% and 14%, respectively most agricultural regions remain underserved. Beyond credit access, farmers struggle with the inefficient distribution of essential inputs, such as fertilizers, seeds, and equipment. Investigations have uncovered widespread fraud in fertilizer subsidy programs, with agro-dealers falsifying sales records to claim subsidies while genuine farmers face shortages. In Benue State, some farmers reportedly spent up to five days at redemption centers, only to leave empty-handed. Past subsidy reforms, like the Growth Enhancement Support (GES) scheme, were meant to streamline input distribution. However, limited access to redemption centers remains a bottleneck. With only 1,466 centers nationwide, accessibility is a challenge. In Kano State alone, 390,876 registered farmers are served by just 80 centers, leading to overcrowding and long delays. Despite the billions allocated to these programs, their impact remains limited due to poor execution and systemic corruption. If Nigeria’s agricultural sector is to thrive, addressing financial exclusion and fixing inefficiencies in input distribution must be a priority. Until then, smallholder farmers will remain stuck in a cycle of low productivity and economic uncertainty.

Policy and Institutional Gaps in Agricultural Funding

Nigeria’s agricultural sector struggles with deep-rooted policy and institutional challenges that make funding unreliable. Despite multiple financial initiatives, weak enforcement, poor coordination, and frequent policy shifts continue to undermine progress. Financial policies designed to ease credit access, such as interest rate caps and collateral-free loans often fail in practice. Banks bypass these regulations, imposing high interest rates that smallholder farmers cannot afford. Even government-backed schemes, like the Agricultural Credit Guarantee Scheme Fund (ACGSF), suffer from high default rates, discouraging further lending. Inconsistent policy execution worsens the problem. The Growth Enhancement Support Scheme (GESS), introduced to streamline subsidy distribution, was disrupted by frequent changes in implementation. Similarly, the Anchor Borrowers' Scheme, aimed at boosting agricultural productivity, saw abrupt funding cuts, leaving farmers stranded during mid-production cycles. Political interference weakens agricultural financing, as many interventions are driven by short-term electoral interests rather than long-term sectorial growth. Budget allocations fluctuate unpredictably, affecting continuity. In 2020, only 15% of the agricultural capital budget was utilized, and dropped to 14.7% in 2021. Fragmented coordination between key institutions like the Central Bank of Nigeria (CBN), the Federal Ministry of Agriculture and Rural Development (FMARD), and the Bank of Agriculture (BOA) creates delays. Overlapping roles and bureaucratic inefficiencies slow down fund disbursement, while delayed payments to agro-dealers disrupt the supply of essential inputs. Without stronger policy enforcement, better institutional coordination, and a stable financing structure, these inefficiencies will persist. Smallholder farmers will continue facing financial uncertainty, limiting agricultural productivity and economic growth.

Opportunities for the G2P Card in Addressing Agricultural Challenges

Agricultural support programs have long struggled with inefficiencies, from fraudulent beneficiaries to poor distribution of inputs. The G2P card presents an opportunity to change this by ensuring that aid reaches the right farmers without leakages. By linking farmers’ National Identity Numbers (NIN) with biometric verification, such as fingerprints and photographs, the system eliminates ghost beneficiaries who have long exploited subsidy and loan programs. With only verified farmers gaining access to government support, the likelihood of funds and resources being diverted is significantly reduced. Beyond eliminating fraud, the G2P card introduces real-time tracking to improve transparency. Poor oversight has led to delays, hoarding, and corruption in distributing fertilizers, seeds, and equipment. With a digital dashboard monitoring fund disbursement and input distribution, every transaction becomes traceable. This means government agencies can track whether resources are reaching farmers as intended, reducing opportunities for mismanagement. More importantly, the G2P card enables targeted and efficient delivery of agricultural inputs. Traditional distribution methods have often failed to consider the specific needs of farmers, leading to mismatched resources and waste. By integrating a comprehensive farmer registry, which includes details on farmland size, crop type, and livestock data, the system allows for better allocation of resources. Even farmers in remote areas, who have historically been excluded due to infrastructure limitations, can now access support, thanks to the card’s ability to function offline. This shift not only ensures fairness but also improves productivity by providing farmers with the right inputs at the right time. By addressing fraud, improving transparency, and ensuring efficient distribution, the G2P card has the potential to transform agricultural support systems.

What Needs to Happen for the G2P Card to Work?

For the G2P card to succeed, its implementation must be both secure and efficient. Fraud has long plagued Nigeria’s agricultural programs, diverting critical resources away from genuine farmers. By linking the card to the National Identity Number (NIN) and using biometric verification, the system can eliminate ghost beneficiaries and ensure that only verified farmers receive support. Real-time tracking will further enhance transparency, allowing authorities to monitor disbursements, detect irregularities, and address inefficiencies before they escalate. However, security alone is not enough. Accessibility remains a major hurdle, particularly in rural areas where internet connectivity is unreliable. While the G2P card’s offline functionality is a step in the right direction, it must be further optimized to ensure seamless transactions, even in the most remote locations. Expanding network infrastructure and deploying payment terminals that function without internet access will be critical to ensuring that no farmer is excluded from the system. Adoption will also be a defining factor. Many smallholder farmers are unfamiliar with digital payment systems, and without adequate training, adoption rates may remain low. A nationwide awareness campaign delivered through cooperatives, extension workers, and radio broadcasts will be essential in building trust. Financial institutions also have a role to play. Banks and fintech companies can develop mobile banking solutions tailored to farmers, enabling smooth transactions and improving access to financial services. With strong oversight, improved accessibility, and widespread adoption, the G2P card has the potential to transform Nigeria’s agricultural funding landscape. If implemented effectively, it could mark a turning point one where farmers no longer struggle with uncertainty, but instead receive the timely support needed to drive productivity and ensure food security.

Conclusion

The G2P card has the potential to transform agricultural support in Nigeria by ensuring that subsidies, loans, and inputs reach the right farmers. However, its success depends on proper implementation—strengthening digital infrastructure, preventing fraud through biometric verification and real-time tracking, and educating farmers on its use. With the right systems in place, the G2P card can improve transparency, boost productivity, and restore trust in government interventions, creating a more efficient and equitable agricultural sector.