Written By Dr. Oluwaseun Adeoye Oyebamiji
A farmer decides in March how much land to plant. He has seed, labour and the expectation of rain. What he may not have is confidence that he will be present at harvest, or that the road to market will be usable when he is.
So he plants less than he could.
Multiply that decision across the grain belt and you have a national food price problem that no monetary policy can reach. Food inflation stood at 16.96 per cent year on year in May 2026, with the National Bureau of Statistics recording rising prices across staples including maize, yam, cassava products, tomatoes and cowpea.
Nigerian firms rank this above everything else that constrains them. In the Central Bank’s Business Expectations Survey for May 2026, insecurity scored highest among reported business constraints at 72.9 points, ahead of multiple taxation at 70.3 and interest rates at 67.7, with noted effects on supply chains, logistics and workforce mobility. Analysts assessing the 2026 outlook placed domestic security and land-use conflicts among the forces shaping economic performance, with agricultural growth projected at about 3.0 per cent partly for this reason.
Here the argument for economic freedom changes shape. Most of the case in Nigeria involves asking the state to withdraw: fewer levies, fewer permits, fewer price directives. This one runs the other way.
Security and the enforcement of contracts are not market functions. No trader can privately supply the rule of law, and a country that leaves people to arrange their own protection tends to get protection rackets, which is a reasonable description of what operates at some of our markets.
Ayittey was clear on this, and it is the part of his work least often quoted by those who invoke him. His reading of indigenous African governance held that the traditional role of authority was to create the peaceful conditions in which trade could flourish, with chiefs adjudicating disputes and keeping order so that markets could function.
His indictment of postcolonial states was not that they governed but that they abandoned this function while expanding into commerce: active where restraint was warranted, negligent where presence was indispensable.
The commercial consequence shows in how Nigerians trade. The Igbo apprenticeship system, igba boi, moves capital and skills from master to apprentice largely without recourse to courts, and Anambra State gave it statutory form in 2025.
The long-distance kola trade between Hausa merchants and the Asante forest zone, documented by Paul Lovejoy in Caravans of Kola, ran for months across the savanna on commercial relationships rather than on courts. Lovejoy also records that these caravans depended heavily on enslaved labour, which is reason to study such networks rather than admire them.
They solved a real problem of enforcement. They also have a ceiling.
A network relying on knowing your counterparty cannot easily admit a stranger, which limits how far any such network can grow. Where enforcement is unreliable, exchange contracts to the circle of people you trust, and that circle is always smaller than the market could have been.
Formal enforcement, meanwhile, is slow enough that better-resourced parties design around it. It is common practice among larger firms to write arbitration clauses into contracts, select foreign governing law and structure holdings offshore.
Those remedies are available to companies with expensive advisers and unavailable to almost everyone else, which makes weak enforcement quietly regressive. The trader in Kano absorbs the loss a multinational contracts away, and pays for the privilege in the price of everything she buys on credit.
The counterargument is that security is genuinely hard, that Nigeria’s terrain and borders are difficult, and that no administration has solved it for want of trying. That is all fair.
But difficulty is not a reason to reorder priorities. A state that funds electricity subsidies and staffs multiple overlapping regulators is making choices about what it treats as essential, and those choices are revealed by budgets rather than by speeches.
Progress is possible without constitutional argument. Fund and extend small claims procedures, of the kind Lagos established in 2018, so that ordinary commercial disputes have a fast and cheap forum. Publish court disposal times so that delay becomes visible and comparable across registries. Enforce judgments reliably, since a judgment that cannot be executed is a document rather than a remedy. And treat the unauthorised levy collector as what he is, which is not a tax administrator.
None of that reaches the farmer directly in March. But the calculation he makes about how much to plant is a calculation about whether the state will hold up its end, and it is made every season, by millions of people, whether or not anyone is measuring it.
Nigerians have built extraordinary commercial institutions on trust because they had to.
The measure of a functioning state is whether they still have to.
Dr. Oluwaseun Adeoye Oyebamiji is a development economist and agricultural policy researcher whose work examines food security, poverty, markets, agricultural policy and economic development, particularly in Africa. His research combines empirical evidence with policy analysis to examine contemporary economic and development issues.
Sources
Anambra State Igbo Apprenticeship Law 2025, effective 10 September 2025, giving statutory form to the igba boi system. Lagos State small claims procedure, established 2018.
Central Bank of Nigeria, Business Expectations Survey, May 2026: insecurity 72.9, high and multiple taxes 70.3, high interest rates 67.7, with recorded effects on supply chains, logistics and workforce mobility.
National Bureau of Statistics, Consumer Price Index for May 2026: food inflation 16.96 per cent year on year, with recorded price movements across maize, yam, cassava products, tomatoes and cowpea.
PwC Nigeria Economic Outlook 2026: on domestic security, land-use conflicts and agricultural growth of approximately 3.0 per cent.
Paul E. Lovejoy, Caravans of Kola: The Hausa Kola Trade, 1700–1900 (Ahmadu Bello University Press, 1980), on long-distance Hausa commercial networks operating on commercial relationships across months of travel, and on their reliance on enslaved labour.
Research on the igba boi system, including work by Prof. Ogechi Adeola, Lagos Business School.