Circular Economy and Climate Resilience: Implications for Governance, Adaptation Strategies, and Economic Inclusion of Smallholder Farmers in Nigeria

Climate change, environmental degradation, and global supply chain disruptions highlight the urgency of advancing circular economy (CE) practices for sustainable agricultural transformation. However, in fragile governance contexts such as Nigeria, CE adoption among smallholder farmers remains uneven. This study investigates the role of governance quality, socioeconomic conditions, and climate variability in shaping CE implementation in Southwest Nigeria. Using survey data from smallholder farmers, we applied an instrumental-variable multivariate probit regression model to account for interdependencies across multiple CE practices, residue recycling, composting, and waste-to-energy. Governance quality was assessed through five indices: transparency, participation, enforcement, coordination, and service delivery. Socioeconomic (education, income, farm size) and climatic variables (rainfall, drought shocks) were included to capture enabling and constraining conditions. The results show that governance quality significantly affects CE adoption patterns: transparency strongly drives residue recycling, participation fosters composting, and enforcement enables capital-intensive waste-to-energy. Coordination and service delivery exert broad positive effects across multiple practices. Education, income, and farm size were positively associated with adoption, whereas climatic variability significantly influenced adoption decisions, reflecting farmers’ sensitivity to ecological shocks. The findings imply that scaling CE in Nigeria requires more than technical innovation; it demands transparent, participatory, and credible governance alongside inclusive socioeconomic support. Policy interventions should prioritize the strengthening of advisory systems, farmer cooperatives, regulatory enforcement, and integrated service delivery while embedding the CE within broader climate adaptation strategies. Through aligning governance quality with inclusive development, CE adoption can foster resilience, economic inclusion, and environmental sustainability in a fractured global order.