• September 23, 2020

Ban on palm oil import: Stakeholders weigh options

The Federal Government’s renewed plan of outright ban of palm oil importation is receiving conflicting reactions from stakeholders in the industry.

While some consider it as a right step towards developing local production, other said it is ill timed, as it might translate to high cost of the commodity in the long run.

A fortnight ago, the Federal Government directed the Central Bank of Nigeria (CBN), to blacklist firms importing palm oil and 42 other items. With the directive, it is now an offence for any company or individual to import palm oil.

The CBN Governor, Mr. Godwin Emefiele, who disclosed this, explained that the new move will also focus on the massive production of 10 commodities: rice, maize, cassava, tomatoes, cotton, oil palm, pottery, fish, livestock and cocoa.

President, National Palm Oil Produce Association of Nigeria, Henry Olatujoye said the directive is obviously going to increase investment in the oil palm industry.

He said to some extent, it will bring the much-needed solution to the industry, but cautioned that it will largely depend on implementation and attitude towards the policy.

“To successfully achieve this, serious efforts should be directed to the borders where thousands of tons of Olein and Crude Pam Oil are entering Nigeria. Blacklisting smugglers is one thing, controlling the borders in another thing. If the borders are not controlled, the policy will not succeed. The success of the policy is directly proportional to the manning of the borders. Apart from this, the CBN should ensure that price is controlled as we implement the policy, else it might go out of hand and further bring hyper-inflation to the sector.

Managing Director, Dangote Tomato Processing Factory, Kano, Abdulkarim Kaita, described the directive as a good move, the only way the economy can grow and bring enough food to the table.

“If you look at what is happening in the agric sector, we are actually importing a lot of products that we can produce locally to feed ourselves, so there is no point allowing such imports. Just like the case of rice, the country previously depended on imported rice, but when they took the decisive action to ban its importation, we can see how rice processing started sprouting up and now we are better for it.

“This is the right step to take in developing the sector and the same thing is happening with the tomato sector and government is moving into the palm oil sector. You’ll discover that those who are setting up plantations and processing units cannot sell their produce because of imported palm oil from Malaysia. So, unless we stop this importation, we’ll be killing the local industries, which are creating employment and making food cheaper.”

Kaita described as wrong notion the claim that local production is not enough to cater for the high demand. “This importation has to stop, if you don’t get palm oil, then look for the alternative. Relevant government agencies tasked with this responsibility should ensure that the policy is carried out to the letter, they need to be up and doing and that is how the policy can work. Mere lip service to the policy will not make it work.”

To Prince Wale Oyekoya, an agriculturist, analyst and commercial farmer, the directive is capable of challenging palm oil plantation and processing units to rise up to the task and increase productivity, but that has to be with the assistance of loans from the CBN.

“I think this initiative would cause the Federal Government to show firmness in supporting local industries. In as much as government is enforcing ban on some select items, it should be ready to give the needed support to increase our local production if we don’t want to starve our teeming population. I believe with necessary support from government many palm oil firms would go back to production.

“However, we should not rush into blacklisting importers if we have not got our house in order. Doing that may lead to starvation, which will negatively impact health of the citizens,” he said.

Oyekoya advised government to champion programmes to sensitise the public, especially youths to win their interest back to agriculture.

But founder, Menitos Farm Depot, Toluwalope Daramola said solution to challenges in the industry does not lie in outright ban, as it may backfire, except steps are taken to enhance capacity of the sub-sector.

“In a country where supply gap exists for palm oil already, it is important to know that ban could backfire. There should be steps to enhance the value-chain production needs like: startup grants, good road and rail networks to link farm communities, as well as subsidised machineries. These are some of the challenges a ban can’t fix, but are required.

“The solution does not lie in this directive. Do we have the capacity to optimise processes in our value chain? Enforcing the directive is critical as well as facilitating local production through education and empowerment of small-scale plantations. Majority of palm plantations are located in areas with terrible roads. It is easy to focus on the big names, but the small farms are equally relevant if we are going to close the supply gap,” she said.

To another Farmer, Tunji Olowokere, it is a wrong move. According to him, the country is yet to strengthen its institutional capacity and with the directive, prices of food commodities will increase in the long run.

“Big players will benefit from these policies but smallholder farmers will find it hard. We always adopt the Fire Brigade approach, despite that a lot need to be done. This is why it will not work. Customs guys will get richer. Pretty sad. It seems we never learn. When has blacklisting or banning of products ever helped the common man in Nigeria? But we keep doing it.”

SOURCE: GUARDIAN

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