Nigeria is currently the fifth largest producer of palm oil globally, with less than two percent of total global market production of 74.08 million Metric Tonnes (mt). The country was overthrown as the world’s largest palm oil producer by Malaysia and Indonesia in 1966.From its vantage position as the leading exporters of the produce, the country is now a net importer, depending solely on other countries to meet the huge supply gap over the years. According to the Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, Nigeria spends $500m yearly on palm oil importation.
It is currently the largest consumer of palm oil in Africa, consuming approximately 1.34 million mt, while production stood at 1.02 million mt, resulting to supply shortfall of 0.32 million mt in 2018, according to the World Bank.In recent years, there has been increase in demand for palm oil in the country, with 90 per cent of the demand coming from food related sources like household consumption and industrial use for food processing (e.g. noodles, margarines and biscuits).
According to PWC, between 2014 and 2018, Nigeria consumed 6.6 million mt of Crude Palm Oil (CPO). Out of the total consumption, local production represented 75 per cent or 4.93 million mt, thereby causing reliance on importation for the shortfall of 25 per cent or 1.67 million mt. The body estimated average official imports of CPO into the country in 2018 at 350,000 mt or $223.65m. Over a five-year period (2014 – 2018), it estimated the official imports of CPO at 1.7 million mt or US$1.28 billion.
Amidst this development, the Federal Government ordered outright ban of Palm Oil importation, probably to encourage local production. It went further few months ago, through the CBN, to blacklist firms importing the produce, together with other 42 items, making it an offence for any company or individual to import palm oil.
What followed this was a policy statement made by Emefiele pointing towards the possibility of making the country self-sufficiency in palm oil between 2022 and 2024 and ultimately overtakes Thailand and Columbia to become the third largest producer over the next few years.Emefiele, who said this at a stakeholders’ meeting on the Palm Oil Value Chain, in Abuja, attended by Governors of Akwa Ibom, Edo and Abia states, noted that the country intended to support improved production of palm oil to meet not only the domestic needs of the market, but to also increase exports to improve forex earnings.
This has however, drew conflicting reactions from stakeholders in the sector. While some see it as mere political statement, others expressed optimism that the country could achieve the feat if the necessary steps are taken towards that direction. President, National Palm Oil Produce Association of Nigeria (NPPAN), Henry Olatujoye said the projection is academic and unrealistic due to the gestation period required for Oil Palm development
He said: “Oil Palm requires six to seven years to attain full economic gain and looking at what is on ground to develop the sector, we can say we are not ready. Issues of finance, land, incentives, equipment and environment are still not being addressed. Oil Palm development requires huge resources to establish, it is not a child’s play.
“I think government should deliberately create investment in the sector by diverting all social and poverty alleviation incentives, like trader moni, and such wastes into funding of Tree crops production such as Oil Palm. It will go a long way in solving the problem.”Senior Programme Manager, IDH, The Sustainable Trade Initiative, Chris Okafor said the issue is not about the projection, but about having the necessary means to locate what to put down. “A lot of things are not happening yet, so how do you hope to get the target? It is possible if all the so-called activities are in place and implemented as planned, definitely that is where the problem is.
“There are several factors that concern tree crops-you are looking at the farm, land, weather, some other crops or forest that are grown within that area. So, if you are going to achieve those things, these things need to be taken care of. Who are the farmers? Do they have access to the lands for them to grow those crops?
“For example, oil farm is not like cassava where you crop for one year and you take your leave, if you cultivate oil farm, you’ll be looking at 30 or 25 years. More importantly, in Nigeria about 80 per cent of oil production are in the hands of smallholder farmers, if you want to do anything to beat the oil farm economy, you must touch this group, so it must be inclusive, if you just talk about few estates that control 12 per cent, how can you grow the economy, No! It’s not possible!”Okafor said the approach must be inclusive in bringing the farmers who constitute the landscape, “I won’t use the word realistic because there are challenges that need to be addressed and we need to achieve those things to be self-sufficient.”
To an Agriculturalist/Consultant, Prince Wale Oyekoya, the projection is possible if the right policy is put in place. “Nigeria has not been lucky to have a visionary leader since independence to sustain or improve on our oil palm and other cash crops. Corruption is another monster that affected our food production where the cabals, leaders and economic saboteurs destroyed our economy through the importation of unwholesome foodstuffs, making us dependent on importation. The projection is possible because we have good arable lands; and human capacity.
“It’s a shame for Nigeria to be importing palm oil. The Federal Government needs to partner state governors on this policy. Government needs to make their policies friendly and people-oriented, the states need to provide land, funds to the farmers and technologically improved hybrid seeds, involve the stakeholders on the policy to be sustainable and provide better infrastructure to the farmers.”
Programme Officer – Communications, Networking and Outreach at Solidaridad Network, Nigeria, Pita Ochai said the projection is realistic. “It is very realistic if they put the necessary things on ground and that is what Solidaridad is doing with The Sustainable Trade Initiative on National Initiative for Sustainable Climate Smart Oil Palm Smallholders (NISCOPS), to build capacity of smallholder farmers. If government can build the capacity of these farmers, of course, not just building their capacity, but ensuring that what we produce and meet up with the RSTO standard, this is the world certification body of palm oil.
“The necessary things, Federal Government needs to put in place include infrastructure, cost of finance for the smallholders farmers and they should also be educated, it is not just burning of trees and planting new ones. “By the time you burn your trees, you are creating deforestation, but the interpretation we are doing is that, you can see that people produce more without deforestation. So, when they are put on ground, infrastructure is there so that the farmers can easily have access to market, also understand the dynamics in the market. There are machines that can do the oil processing, let government bring-in the modern machines that can protect the environment and produce good palm oil.”