CBN, states, banks, in talks to rescucitate Nigeria’s moribund palm oil sector 

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Nigeria’s Central Bank, on Monday began talks with key players across the palm oil value chain- including state governments, banks, as well as some other stakeholders to map out a sustainable strategy that would help resuscitate the country’s moribund palm oil industry under its Anchor Borrowers programme.

The strategy involves, among other things a loan programme for industry participants at not more than 9 percent, Godwin Emefiele, CBN Governor said at the meeting which had governors of Abia state, Okezie Ikpeazu;  Akwa Ibom, Emmanuel Udom; as well as Edo, Godwin Obadeki present.

Emefiele said the meeting was enlarged to include state Governors and other top government functionaries from the oil palm producing states to elicit their buy-in and set a partnership model that would, with immediate effect, stimulate investments in the palm oil plantations, such that within the next 3-5 years, the global share of Nigeria’s oil palm production would more than double.

“Our ultimate vision is to overtake Thailand and Columbia to become the 3rd largest producer over the next few years.

“This conversation is indeed important as it forms part of our overall strategy to reduce our reliance on crude oil imports, diversify the productive base of our economy, create jobs and conserve our foreign exchange,” Emefiele explained.

At the meeting, the governor regretted that despite placing oil palm in the forex exclusion list, official figures indicate that importation of palm oil had declined by about 40 per cent from the peak of 506,000 MTs in 2014 to 302,000 MT in 2017.

According to him, this indicates that Nigeria still expends close to $500 million on oil palm importation annually and we are determined to change this narrative.

“If we had kept pace with our peers in supporting improved cultivation of palm oil, at the current global market price of $600 per tonne, and an assumed production level of 16m tonnes, Nigeria could have generated close to $10bn worth of foreign exchange for the country.

“This excludes huge jobs that could have been created in our rural communities from large scale small holder developments.”

The meeting came two weeks after the CBN met with stakeholders in the Cotton, Textile & Garment sector and announced some policy measures that reinforced  ban on the use of forex from official sources to finance import of textiles.

Following that, steps are currently being taken to penalize smugglers of textile materials who are utilizing our financial system to conduct these illegal activities.

“We intend to support improved production of palm oil to meet not only the domestic needs of the market, but to also increase our exports in order to improve our forex earnings.

“We also hope to identify promising approaches that will help in revitalizing this key sector and also enable Nigeria to regain its position as one of the leading global producers of palm oil,” Emefiele stated at the meeting.

He assured that as part of the Anchor Borrowers Program (ABP) and our Commercial Agriculture Credit Scheme (CACS), the CBN would work with large corporate stakeholders and small holder farmers to ensure availability of quality seeds for this year’s planting season and agro-chemicals in order to enable improved cultivation of palm oil.

He said the CBN would also work to encourage viable off taker agreements between farmers and large-scale palm producing companies.

According to him,  the renewed focus by the CBN to support improved growth in the Agriculture and Manufacturing Sectors in Nigeria, is clearly in line with the Federal Government’s determination to diversify the base of Nigeria’s economy away from reliance on crude oil, so as to insulate our economy from the vagaries and shocks associated with volatility in crude oil prices.

He also mentioned that in due course, the CBN would also address challenges in the cocoa, cassava, beef/cattle ranching, dairy and fish sectors. Soon every region of our beloved country will feel the positive impact of our intervention in the agricultural sector.

He pleaded for the cooperation of the state Governors in the oil palm producing zone to make land available to investors with proven financial and technical capabilities, who wouldl be able to support developments of large scale palm oil plantations in the country.

Governor Obaseki of Edo state responding lauded the CBN ‘s developmental efforts but emphasized the need to come up with a clear execution plan.

His colleagues, Ikpeazu of Abia state said his state would soon experience palm oil glut and that what they would need now is a support along the value chain.

Akwa Ibom state, Udom also commending the initiative called for an efficient execution plan and mentioned the need for the buy-in of the research institutes.

Onyinye Nwachukwu, Abuja 

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