Scarcity of resources is one major source of competition between and among different groups in all existing human society. The sedentary farmers and nomadic pastoralists are two major groups situated in the Lake Chad Basin who are consistently competing over land and water resources for survival. Thus, the consistent shrinking of the Lake over the years made fierce struggles by the two groups over access and use of resources inevitable. The Basin serves as source of livelihood to the pastoralists and farmers who cultivate the land as well as fishermen who are also dependent on the available surface water. The Lake Chad environmental impact has been viewed from various perspectives depending on the context and dynamics thereupon. These therefore relate to socio-economic and political context, peace and security, climate change among other variables. Nigeria, Niger, Chad and Cameroun are the riparian states to the Lake Chad basin. This paper examined the effects of environmental challenges in the Lake Chad basin as it became a potential source of conflict between Farmers and pastoralists. The paper utilized Neo-Malthusian Environmental Scarcity Theory proposed and developed by Homer-Dixon, also, the paper adopts qualitative research method with data sourced from array of secondary sources which were qualitatively analyzed. The findings revealed among others that resource-based conflict is likely to continue unabated and part of the practical solution to it, is the attempt to recharge the Lake by the countries involved Nigeria inclusive. Key Words: Environmental Challenges, Farmers, Herders, Resources, Competition.