Smallholder oil palm producers reject CBN’s 9% interest rate loans, demand 2%

Small and medium-size palm oil producers have rejected nine per cent interest facilities bandied by the Central Bank of Nigeria (CBN), saying the fund from which the facilities are to be drawn belongs to the sector players through a policy emplaced by the Olusegun Obasanjo-led government.

The association also said it would only take a maximum of two per cent interest facilities on the ground that palm plantation investment requires a long-term capital outlay, and nine per cent interest rate would make such facilities unsustainable and un-refundable.

Henry Olatujoye, the President of the National Palm Produce Association of Nigeria (NPPAN), the small and medium-scale operators in the crude palm oil production sector, disclosed this to The Guardian.

It is recalled that based on a presidential directive a couple of weeks ago, the governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, at a meeting with oil palm producers, warned that those caught smuggling palm oil into the country would be blacklisted from all banking businesses and would also be blocked from the foreign exchange market.

Emefiele disclosed that close to about N30 billion had already been disbursed to those currently involved in oil palm farming.

“We want to make everybody understand how serious we are and also to emphasise that what we are doing to stop the importation of oil palm into Nigeria is a presidential directive that must be adhered to.

“Doing this also means that while we are stopping the importation of palm oil, we must do all possible to ensure that palm oil production is aggressively increased in Nigeria,” he had said.

Olajutoye, however, lamented that “The activities of smuggling are killing our members and the government is not doing much to check the influx. Instead, they are boasting of giving N30 billion to the sector. We opine that the government are wasting their time and promoting business colonisation.

“Banning Crude Palm Oil (CPO) is not and will never be the answer to the crisis in the sector. During the Olusegun Obasanjo-led government, the administration tried to ban CPO, but later discovered that the consequences were many.”

He added that the administration cancelled the ban and put a protective duty on import. This, he explained, had been in place since that time, saying, “the duty is of two components, which are 10% as duty payable per tonne of oil and 25% as levy for the development of the sector.”

NPPAN, therefore, demanded that the government should account for the 25% levy for the development of the sector it has collected on importation of CPO legally into the country from 1999 to date.

The association said the fund should be deployed for the development of the sector in areas like research and development, land allocation, provision of seedlings, processing equipment and others.

“The government should release the money to oil palm farmers at two per cent interest rate. We reject nine per cent from the CBN. This money in question is not government’s money. It is money paid by importers as levy to develop the sector.

“The government should immediately scoop the sector to determine the actual hectares under cultivation. This will debunk the fake data being peddled around as our capacity.

“All smallholder farmers should be able to access this fund without hindrances and at 2% interest rate. This rate is allowed for cost of fund. This fund belongs to us, not government,” Olatujoye said.

The association said all smuggling operations, backdoor issuance of ETLS and form M approval should be stopped and every genuine stakeholder should be seen to be on the same page.

“The government should give more attention to smallholders who have invested their hard earned gratuities to plant palm trees than the foreign investors the CBN is promoting with our money,” Olatujoye added, “and we demand the release of the 25% levy from the CBN without delay. Please emphasize this on our behalf.”


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