$20bn lost annually to poor investment in palm oil, say stakeholders
accounts for less than 2% global output
Nigeria, Africa’s largest ECONOMY with a gross domestic product of $470 billion, is losing about $20 billion in unearned revenue due to its continued poor investment in the palm oil sector, especially with its inability to expand and upgrade its existing hectarage of the cash crop, which current global output is put at 74.08 million metric tonnes.
Today, with an annual production level of only 1.02 million metric tonnes, but with a national consumption of 1.34 million metric tonns, Nigeria is the fifth producer of palm oil in the world; a product she had initially enjoyed global top place in the early 1960s holding down 43 percent of world market share before the onset of its fratricidal civil war (19671970).
Like the consuming nation she’s itself into, with yet unclear evidence of gravitating into production, Nigeria is the largest consumer of fats and oils in Africa of approximately 3 million metric tonnes in 2018, according to Central Bank of Nigeria (CBN) figures. This development pushes up huge importation of the product, as importers spend $500 million annually on importing the commodity.
Last July, some oil palm stakeholders gathering in Port Harcourt, Rivers State, and keen on getting the nation to revamp its ailing palm oil industry, called on the CBN and Debt Management Office (DMO) to create a $1 billion 10-year bond dedicated to the
oil palm industry. For only such would guarantee increased national output, thereby meeting the current supply–demand gap, and dissuade importers and smugglers of crude palm oil (CPO) from neighbouring countries.
They also asked the CBN to not
just threaten to blacklist oil palm products importers, but should help channel domestic investment in the sector saying that such threat “cannot provide the critical mass of capital required to drive growth in the industry.”
Robinson Imade, a palm oil
famer in Edo State said the Federal Government must critically encourage farmers of the cash crop with incentives like it had done in Agricultural Development Projects (ADPs) and FADAMA.
Additionally, farmers and stakeholders in the sector in Rivers, a key producer of palm oil, asked that “state governments must deliberately create and empower large ticket entrepreneurs who can power the growth in the palm oil industry. Government cannot run the industry, but must define the direction the industry will go by getting dedicated and committed investors interested in the industry. Government must also intensify training,” they said.
They hold the strong view that government–private sector partnership is critical for the palm oil industry. “Government can and must create land. The current system of dispossessing peasant farmers of their lands is not sustainable, as it spreads poverty. Palm oil development must be a partnership between large-scale developers and rural land owners,” they said.
Imade said since 1966, Malaysia and Indonesia had surpassed Nigeria as the world’s largest palm oil producers. Since then till date, both countries combined produce approximately 80 percent of total global output, with Indonesia alone responsible for 53.3 percent of global output.
“If Nigeria had maintained its market dominance in the palm oil industry, today the country would have been earning approximately $20 billion annually from cultivation and processing of palm oil,” he said.