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By Excel Ogisi & David Ajayi
Key stakeholders from Nigeria’s financial, agricultural, environmental, and development sectors convened in Lagos to advance the country’s transition toward deforestation-free finance and sustainable agricultural investment.
The two-day Deforestation-Free Finance Workshop, organized under the Food Systems, Land Use and Restoration (FOLUR) Integrated Programme and implemented by the Food and Agriculture Organization of the United Nations (FAO) in collaboration with, the National Taskforce on EUDR, TRACE, GIZ led EU-VACE TARED project, and PropCom+ project, provided a platform for dialogue on integrating sustainability considerations into Nigeria’s financial system.
Held under the theme “Advancing Deforestation-Free Finance in Nigeria’s Banking Sector: From Roadmap to Implementation,” the workshop brought together over 100 representatives from government ministries and agencies, the Central Bank of Nigeria, commercial and development finance institutions, agribusinesses, farmer organizations, civil society groups, researchers, and development partners.
The event comes at a critical time as global markets increasingly demand sustainable and traceable agricultural commodities. Emerging regulations, including the European Union Deforestation Regulation (EUDR), alongside broader Environmental, Social and Governance (ESG) standards, are reshaping investment and trade requirements for agricultural value chains worldwide.
Participants emphasized that Nigeria’s agricultural sector remains vital to economic growth, food security, employment, and export earnings. However, achieving long-term agricultural growth will require financing systems that support productivity while safeguarding forests, biodiversity, and ecosystem services.
A central focus of the workshop was the role of financial institutions in influencing land-use decisions and promoting sustainable agricultural practices. Participants examined Nigeria’s emerging Deforestation-Free Finance Transition Roadmap and explored practical approaches for integrating environmental and social considerations into lending and investment decisions.
Discussions highlighted the growing recognition that climate change, biodiversity loss, land degradation, and deforestation are increasingly becoming material financial risks. Participants agreed that sustainable finance is no longer optional but an important component of maintaining market access, competitiveness, and long-term economic resilience.
The workshop also identified persistent financing gaps across agricultural value chains, particularly in cocoa, oil palm, forestry, and agroforestry sectors. While capital exists within the financial system, stakeholders noted that many financial products remain poorly aligned with agricultural realities, limiting access to finance for producers and agribusinesses.
Participants further explored opportunities to strengthen the alignment between public support mechanisms and sustainability outcomes. Discussions highlighted growing interest in performance-based financing approaches that reward measurable environmental and social outcomes, including compliance with ESG standards, adoption of agroforestry practices, participation in traceable value chains, and the promotion of deforestation-free production systems. In this context, the proposed Eco-Credit mechanism emerged as a promising model for linking financial incentives to verified sustainability performance. Participants noted that such approaches could help mobilize private investment, improve market access, and strengthen the long-term resilience and competitiveness of Nigeria’s agricultural sector.
Special attention was given to the forestry sector, which participants observed continues to receive inadequate financing despite its environmental and economic importance. Discussions also highlighted the risk of excluding smallholder farmers, women, and youth from emerging sustainability-focused markets unless targeted inclusion measures are adopted.
To address these challenges, participants explored innovative financing mechanisms capable of supporting climate-smart and deforestation-free agricultural development. These included blended finance, Eco-Credit financing, Payment-for-Results models, credit guarantees, insurance products, and export-linked commodity finance. Experiences from Ghana and other countries demonstrated how strategic partnerships, technical assistance, and risk-sharing arrangements can unlock investment in sustainable production systems.
The workshop further underscored the importance of strengthening geospatial monitoring, traceability systems, and environmental data infrastructure. Participants noted that reliable sustainability data is essential for risk assessment, compliance, and verification, particularly as financial institutions increasingly integrate ESG considerations into their operations.
Recognizing existing capacity gaps, stakeholders also called for enhanced technical support and knowledge development to enable financial institutions to better understand sustainability risks and opportunities within agricultural lending portfolios.
At the conclusion of the workshop, participants adopted a series of resolutions aimed at accelerating implementation of Nigeria’s Deforestation-Free Finance Transition Roadmap. Key commitments included strengthening ESG risk management practices, promoting climate-smart and deforestation-free investments, supporting inclusive financing for smallholder farmers, women, and youth, and developing specialized financial products for cocoa, oil palm, forestry, and agroforestry value chains.
Participants also committed to investing in traceability and geospatial monitoring systems, strengthening collaboration among regulators and financial institutions, mobilizing resources for pilot initiatives, and advancing innovative financing approaches, including the Eco-Credit model, to support verified sustainability performance and deforestation-free value chains.
The workshop concluded with a call for stronger collaboration and commitment among government, financial institutions, development partners, agribusinesses, civil society organizations, and farmer groups to build a sustainable financial ecosystem that promotes responsible agricultural production, protects forest resources, strengthens rural livelihoods, and enhances Nigeria’s competitiveness in global markets.
By fostering dialogue, strengthening technical understanding, and building consensus around practical actions, the workshop marked an important step in advancing sustainable finance solutions that can support both agricultural transformation and environmental sustainability. Participants reaffirmed their commitment to continued engagement under the FAO-FOLUR Nigeria Project and related national initiatives as Nigeria progresses toward a more resilient and deforestation-free economy.
[Published on June 28, 2026]
