Nigeria’s agricultural sector is witnessing a major boost in financial protection, as more than 1.47 million smallholder farmers across the country are now covered under various agricultural insurance schemes, according to the National Insurance Commission (NAICOM).
The development marks a critical step in de-risking agriculture, protecting farmers from climate and market shocks, and positioning insurance as a key driver of productivity and food security.
Expanding Insurance Coverage for Farmers
Speaking at the 2025 Stakeholders’ Retreat of the House Committee on Insurance and Actuarial Matters in Maiduguri, the Commissioner for Insurance and NAICOM Chief Executive Officer, Olusegun Omosehin, said the coverage expansion was largely achieved through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).
Omosehin disclosed that NIRSAL’s agricultural insurance initiative aims to reach 3.6 million farmers by 2026, with significant progress already recorded across multiple states.
“In the second quarter of 2025 alone, over 250,000 farmers were insured across eight states under various federal agricultural insurance schemes,” he said. “To date, 1.47 million smallholder farmers have been covered under NIRSAL’s agricultural insurance programmes, and we are on track to reach 3.6 million by next year.”
Insurance as a Catalyst for Productivity
Omosehin highlighted how insurance is beginning to transform the dynamics of agricultural production in Nigeria, particularly by enabling farmers to take more informed risks and recover faster from losses.
In the North Central region, for example, insured rice farmers recorded an 11% increase in productivity compared to their uninsured peers, averaging 20 bags per hectare versus 18.
He also cited success stories from Kaduna State, where ginger farmers received compensation under the NAGS-AP scheme after losing over 90% of their harvest due to extreme weather conditions.
“Agriculture remains the backbone of Nigeria’s rural economy, yet it is also one of the most vulnerable sectors to climate shocks, floods, and pest outbreaks,” Omosehin said. “Insurance provides a vital safety net that allows farmers to invest confidently and recover quickly when disruptions occur.”
Beyond crops, NAICOM noted that livestock and encroachment insurance in Sokoto, Bauchi, Adamawa, and Plateau States has helped reduce farmer-herder conflicts—one of the most persistent challenges threatening Nigeria’s agricultural stability.
Strengthening the Regulatory Framework: NIIRA 2025
Omosehin used the occasion to emphasize the importance of the Nigerian Insurance Industry Reform Act (NIIRA) 2025, describing it as a landmark piece of legislation that modernizes the country’s insurance framework and enhances regulatory effectiveness.
He called on lawmakers and government agencies to collaborate closely with NAICOM to ensure the full implementation of compulsory insurance provisions and promote compliance across ministries, departments, and agencies (MDAs).
“The NIIRA 2025 law has been enacted, but the real work is just beginning,” he stated. “We need the support of the National Assembly to ensure alignment between federal and state policies, strengthen enforcement, and raise awareness about compulsory insurance obligations.”
According to him, the new law consolidates decades of fragmented legislation into a single, modern legal framework designed to empower regulators, protect consumers, and drive innovation in the sector.
Key Provisions of NIIRA 2025
Signed into law by President Bola Tinubu in August 2025, the NIIRA introduces sweeping reforms aimed at repositioning Nigeria’s insurance industry for global competitiveness and supporting the administration’s vision of a $1 trillion economy.
The Act introduces stricter capital requirements for insurers and reinsurers, mandatory enforcement of compulsory insurance across critical sectors, and digitization mandates to improve service delivery and data integrity.
It also strengthens NAICOM’s authority to supervise and regulate all insurance and reinsurance operations in the country, ensuring higher standards of transparency and accountability.
Looking Ahead
As Nigeria grapples with the twin challenges of food insecurity and climate risk, NAICOM’s expansion of agricultural insurance is emerging as a strategic lifeline for millions of farmers.
With nearly 1.5 million already covered and a goal to more than double that number by 2026, the Commission believes insurance will become a cornerstone of national agricultural policy—helping farmers transition from subsistence to commercial production while ensuring stability and growth in the wider economy.
“If we get agricultural insurance right,” Omosehin concluded, “we will unlock unprecedented productivity, safeguard livelihoods, and build resilience in one of Nigeria’s most critical sectors.”
