ECONOMICS OF ECOSYSTEM SERVICES FROM AGRICULTURAL WASTE RECYCLING SYSTEM: CASE STUDY OF THE FEDERAL CAPITAL TERRITORY

Agriculture in Nigeria is multi-dimensional, producing food, feed, fibre, and fuel, while also providing intangible ecosystem services that largely remain un-priced. Because farmers are not compensated for these services, the adoption of eco-friendly technologies for sustainable agricultural development is constrained. Concurrently, the conversion of agricultural residues into value-added products has emerged as a strategic pathway for economic transformation and circularity. This study investigated the economics of ecosystem services from agricultural waste recycling systems and their effect on smallholder welfare in Nigeria, with a case study of the Federal Capital Territory [FCT]. Agricultural residues, often treated as environmental liabilities, possess significant economic potential when processed into products such as biogas, organic fertilizer, bio-briquettes, and biochar. Using secondary data from 2015 to 2024, and FCT-specific data for the 2022/2023 production cycle, the study:  Identified and quantified waste streams; estimated the economic value of provisioning and regulating ecosystem services; assessed contributions to smallholder income and rural employment; evaluated the level of adoption of eco-friendly recycling technologies; and lastly, examined policy factors influencing monetization. Findings for FCT show an annual generation of 547,199 tonnes of bio-waste, with potential to produce 17.39 million m³ of biogas and 98,943 tonnes of biochar. The economic potential was estimated at ₦17.45 billion per year. Environmentally, utilization can avoid 369,095 tonnes of CO2e per year. The findings provide empirical evidence to address the data gap in the National Climate Change Policy for Nigeria 2021–2030 and support integration of agro-waste recycling into Nigeria’s circular bio-economy.