Despite rising production, Nigeria’s groundnut sector remains hampered by weak post-harvest systems and insufficient value-addition. Experts say that unless storage and processing challenges are confronted head-on, the country cannot fully reap the benefits of its agricultural gains.
Nigeria has seen groundnut output climb — from 4.4 million tonnes in 2017 to 5.0 million in 2025 — and it is expected to grow another 3.1 percent this year. But this promising trend masks a deeper issue: the country does not have the infrastructure or capacity to move beyond raw product exports.
Poor storage is especially damaging. Faulty drying and packaging processes leave groundnuts vulnerable to aflatoxin contamination — in many cases, exceeding safety limits by five times or more. Experts report that 30 – 50 percent of samples from key producing states are contaminated.
“The lack of storage infrastructure and low large-scale value addition and standardization has been a major challenge impacting groundnut exports in Nigeria,” said Chinedu Agbaji of AFAN. “This is largely due to low output subsidy which makes small-scale farmers with fewer resources continue using poor storage practices to preserve groundnuts.”
Aflatoxin poses serious health dangers. “Long-term exposure to such contamination can suppress the immune system, worsen viral infections like HIV/AIDS, cause male infertility, liver cancer, and even death,” warns a study from the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT).
Processing is another weak link. “Processed groundnuts yield significantly higher profits than raw ones, but most of our products are sold raw, limiting sector growth,” said Dennison Terkohol, a groundnut processor and aggregator.
Currently, Nigeria exports raw groundnuts worth about USD 1.2 million, even while importing over USD 6.6 million in groundnut products. Large processors like Olam and Gyada play a role, but their scale is insufficient to transform the sector.
According to Emmanuel Udeogu of IGFAN, farmers often miss export deals because they cannot guarantee supply volume or product quality. “I recently tried connecting some of our members to export opportunities with investors from Tanzania and South Africa, but we couldn’t pull through due to insufficient supplies arising from these challenges and lack of high-quality varieties,” he said. “Farmers get discouraged when they don’t get support, especially when trying to meet investor demands.”
Abdulrazaq Muhammad, acting president of NGROPPMAN, adds: “Nigeria currently produces more groundnuts than it did during the famous pyramid era, but the challenge is that we are neglected, there is hardly any tangible support coming our way.”
Despite these obstacles, some small-scale processors are showing what’s possible. One roasted groundnut business earned a gross profit of N13,000 from 4 kg of nuts sold in bottles. A coated peanut venture also reported steady daily returns, albeit modest.
Globally, the processed groundnut market was valued at USD 10.43 billion in 2023 and is projected to reach USD 14.14 billion by 2030. The rise is driven by increasing health consciousness, demand for plant-based oils, and awareness of groundnut oil’s properties.
To reverse its present trajectory, Nigeria must prioritize investments in storage systems, strengthen coordination between government and private players, scale farmer aggregation, and offer output incentives—not just for cultivation but for post-harvest handling. Chinedu Agbaji argues, “Rather than focus solely on input incentives, we also need output incentives, particularly storage infrastructure support and access to post-harvest funds for local farmers.”
If the country can close these gaps, it can not only supply more raw nuts but also capture export markets for high-value processed products. The potential is there — the question is whether Nigeria will step up to realize it.
