ECONOMYFEATURED SLIDER

Imperatives to revive palm oil industry

Success Nwogu

The palm oil industry played a significant role in Nigeria’s economy prior to the discovery of crude oil in commercial quantity on January 16, 1956, at Oloibiri in Ogbia Local Government Area of the present-day Bayelsa State.

Nigeria, as early as 1901, was producing palm oil for the international market.
According to the Central Bank of Nigeria, (CBN), Nigeria was the largest producer of palm oil globally in the 1950s and 1960s before it was overtaken by Indonesia and Malaysia.

In fact, Nigeria was the leader in the world palm oil market as the country’s palm oil production extended beyond domestic consumption, while the excess produce was exported to the world palm oil market.

The country was also a leading exporter of palm kernels. The palm oil sector in Nigeria generated about 43 percent of the world’s total production in the 1950s and 1960s and was a major source of foreign exchange earnings for the country.
In addition, it is estimated that palm oil production provides jobs for millions of Nigerians.

But sadly, owing to the neglect of the palm oil industry after the discovery of crude oil, Nigeria is now regarded as the fifth largest oil palm producer in the world.

Even Thailand and Columbia, as well as mega countries, such as Indonesia and Malaysia, have overtaken the former no one producer of palm oil in the world.
Nigeria, regrettably, now contributes less than two percent of about 75 million metric tonnes of palm oil produced worldwide.
To worsen the situation, Nigeria now does not even produce enough for domestic consumption.

The Deputy Director, Department of Agriculture in the Federal Ministry of Agriculture and Rural Development, Mr. Benard Okata, said that Nigeria was producing only about 1.02 metric tonnes of oil palm, while its local requirement for palm oil was about three million metric tonnes.

Okata, who spoke in Abuja during a national workshop on oil palm organised by Solidaridad, an international non-governmental organisation, lamented that Nigeria is spending about $500m annually in palm oil importation in order to complement existing gaps in the sector.

Also the CBN Governor, Mr. Godwin Emefiele, was quoted to have made a similar claim and added that it was unpalatable and regressive that the country was still importing palm oil in spite of its abundant potential to produce enough for domestic consumption and even maintain its leadership in the global palm oil market.

The apex bank governor had noted that the South-East and South-South regions of the country have enough arable land, good climate, and sufficient manpower resources, for the cultivation of oil palm estates and production of palm oil (Elaeis Guineensis) which is believed to be a native of West Africa.

Historically, Nigeria is among the most probable place where the fruit was first domesticated before the 14th century.

The palm tree is found predominantly in southern Nigeria, especially in the wet rain forests and savanna belt. It also exists in the wet parts of the North Central region of Nigeria, in areas like the Federal Capital Territory (FCT), Kogi, Kwara, Benue, Niger, Nasarawa, Plateau, and Taraba States. It is also found in Southern Kaduna.

Smallholding, medium size plantation, and large-scale (estate) plantation are the three categories of palm plantation in the country.

Some factors had been identified as being responsible for Nigeria’s decline in palm oil global dominance.

They include the Nigeria-Biafra civil war between 1967 and 1970 in areas where palm activities were predominant; over-reliance on traditional production methods, and excessive tapping of palm trees for palm wine.

There is therefore an urgent need to address the challenges of oil palm production and thereby restore Nigeria to its number one global producer.

To achieve this, it is important to increase the ability of oil palm tree farmers to access substantial capital with a considerate interest rate and a moratorium as palm production requires not only hard work and more effort but adequate capital with a considerable repayment period.
It is estimated that between $4,000 and $5000 is needed to develop one hectare of oil palm.

Also, the gestation period takes about five to six years before full commercial production commences.
In addition, banks should show more commitment to financing palm production as some commercial banks are very reluctant to accept land assets in rural areas as collateral for loans.

It is also imperative to ensure peaceful possession of land by farmers and the adoption of modern technologies and practices in the palm oil industry.
Moreover, the youth should be attracted to the industry through appropriate incentives.

The non-establishment of the Oil Palm Council, which should have been formulating and implementing policies for the industry, is another challenge that should be addressed.

Clearly, Federal Government should, as a matter of policy and top priority, support commercial palm oil production in the country as it is believed that for Nigeria to fill the existing gaps in its palm oil production, about 100,000 hectares of oil palm should be planted.

Undoubtedly, the implementation of these measures, will be most beneficial to the economy and lead to CBN’s projectiob that Nigeria could make over $20bn annually from cultivation and processing of palm.
Serious efforts should be made to improve local production, in order to restore the nation’s global market dominance in the industry.

Surely, a vitalized palm oil industry also will generate more employment opportunities for the teeming unemployed and under-employed Nigerians and facilitate national economic development.

.Nwogu, a seasoned journalist, writes from Lagos, Nigeria. Kindly send feedback to: [email protected]

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