Palm Oil Production: Getting Nigeria On Top Again

  • Mar 25, 2019
  • Daily Independent

There was a time when Nigeria was the world leader in palm oil production. That was in the 1960s when Nigeria not only led world production of the commodity but accounted for 40 per cent of global supply. Those were the days when the likes of Calaro Oil Palm Estate in what is now Akamkpa Local Government Council of Cross River State with a palm plantation stretching for well over 20 square kilometres was producing at its peak.

Calaro Oil Palm Estate had the largest palm fruit processing mill in West Africa which processed the high yield fruits from the plantation into palm oil, palm kernel oil and pellets for local consumption and exports. Today the estate and its mill are shadows of their past glories because of low yield ageing palm trees emanating from decades of neglect and mismanagement as crude oil diverts attention from agriculture.

Nigeria has slipped from its leading position in palm oil production to a distant number-five in the world chart. Annually, Malaysia and Indonesia produce 25 and 40 million metric tons of palm oil respectively, while Nigeria manages to chip in a paltry 800, 000 tons in its position as distant number-five.

Ironically, it is on record that Malaysia obtained oil palm seedlings from Nigeria in 1965 and is now feeding Nigeria with the products of the seedlings it obtained some 54 years ago.

Statistics from the Central Bank of Nigeria (CBN) suggests that Nigeria’s annual palm oil imports have dropped to 350, 000 metric tons from a peak of 500, 000 metric tons, but stakeholders in the industry contend that Nigeria imports a minimum of 1.5 million metric tons of palm oil annually.

The yawning gap between government and industry figures emanates from the fact that the CBN has added palm oil to Nigeria’s growing list of items that could not be imported with forex from official sources. It therefore implies that well over one million tons of palm oil is smuggled into the country annually just as rice and automobiles.

Nigeria is in a very precarious situation as it spends billions of dollars annually on the importation of items it is naturally endowed to produce.

Last week Godwin Emefiele, CBN governor said that Nigeria spends $500 million annually on palm oil imports. Statistics from the industry suggests that the CBN figure is a tiny fraction of what Nigeria spends on palm oil importation as smugglers ferry in three times what the CBN records as annual imports of palm oil.

Nigeria can return to the days when it led the world in palm oil production. Emefiele in a speech during a stakeholders meeting in Abuja last week reeled out measures the apex bank intends to implement to conjure a surge in palm oil production in the country.

“As part of our Anchor Borrowers Programme (ABP) and Commercial Agriculture Credit Scheme (CACS) the CBN will work with large corporate stakeholders and small holder farmers to ensure availability of quality seeds for this year’s planting season.

“We will also ensure availability of agro-chemicals in order to enable improved cultivation of oil palm…Loans will be granted through our ABP and CACS programmes at no more than 9 per cent per annum to identified core borrowers”, said the CBN governor.

Emefiele was speaking to a stakeholders’ audience on the palm oil value chain which included the governors of Edo, Akwa Ibom and Abia states which have the highest potential for palm plantation development. The managers of Dangote Farms, Flour Mills, United Food Industries and Dufil Prima Foods Plc., key users of palm oil as raw materials were also present at the meeting with the CBN.

We believe that the federal government can revive the oil palm industry and return Nigeria to its leading position in palm oil production if the policies outlined by the CBN are implemented to the letters.

Government has to collaborate with governors of the states where oil palm cultivation is viable to ease the cumbersome process of land acquisition for the establishment of large scale oil palm plantations. The Land Use Act has for decades inhibited the acquisition of land for massive investment in agricultural schemes. That obstacle must be removed to empower big corporate organisations to embark on oil palm plantation development that would create millions of jobs and reduce Nigeria’s shameful dependence on crude oil exports for foreign exchange earnings.

Besides, the Nigerian Institute for Oil Palm Research (NIFOR) in Benin City, Edo State must be resuscitated and adequately funded to improve the research and production of quality oil palm seedlings which farmers would rely upon for high yield.

NIFOR, which metamorphosed from the West African Institute for Oil Palm Research (WAIFOR) in the 1960s, has been dormant for decades due to dearth of funds and pro-active management. The institute which used to feed the large scale oil palm plantations of the 1960s with high yield seedlings has lost its relevance to the industry. It has to be reactivated if the CBN plan for self-reliance in palm realised.