The Senate has disclosed that businesses imported 450,000 metric tons of palm oil at a total cost of N116.3 billion into the country in 2017. This is despite the crop being among the 41 items restricted from accessing foreign exchange by the Central Bank of Nigeria and the growing concern of the country’s high food import bill, which gulps $3 billion yearly.
Francis Alimikhena, (APC Edo North), who made the disclosure at plenary session Tuesday, did not disclose the source of his figures. But data from the National Bureau of Statistics (NBS) show that Nigeria imported a total of N14.42 billion worth of Crude Palm Oil (CPO) in the third quarter of 2017, up from N7 billion in the second quarter, indicating a 106 percent increase on a quarter on quarter basis.
Nigeria has seen imports of CPO rising rapidly as domestic production has remained stagnant for the past five years, despite growing demand of the crop.
Currently, the country produces about 970,000 metric tons of CPO, while local consumption is put at 2.7 million metric tonnes per annum; indicating an estimated demand-supply gap of over 1.7 million MT. Nigeria imports from countries such Indonesia, Malaysia, Ivory Coast and Ghana to bridge the huge supply and demand gap.
Alimikhena expressed concern that the unbridled importation of palm kernel and allied palm products into Nigeria was a threat to the Federal Government’s campaign for the diversification of the economy through increased agricultural production and exports.
“The Senate is aware that Nigeria was the world leading producer of palm oil at independence but unfortunately, Indonesia and Malaysia have overtaken Nigeria and we now import palm oil,” Alimikhena said.
“The government must reverse this trend with copious investments in the local palm industry and the protection of local producers from unnecessary imports. We have the land and the manpower to become a formidable force in oil palm production,” he said.
Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to recover and take its proper place in the comity of crude palm oil producing nations. This has been attributed to the discovery of crude oil, which changed the country’s palm oil narrative of the 60s.
As a result, Indonesia and Malaysia have now surpassed Nigeria’s production, becoming the global leaders in oil palm output. Now, Nigeria is the fifth largest palm oil producer globally.
With a well-developed palm oil industry, oil palm has the potential to earn huge foreign exchange for the country, experts say.
An expert, who spoke with BusinessDay, says Nigeria can regain its status as a net exporter of crude palm oil when there is a well-articulated development plan for the subsector, with clear targets, strategies and timelines.
“The country’s production has been stagnant, even though big plantations are coming up, smallholder production, which constitute over 80 percent of the total palm oil production in Nigeria, has continued to drop due to aging trees and poor management,” said Steven Babajide, country representative, Solidaridad’s Network, in an email response to questions.
“With a development plan, critical segments along the entire value chain would then be addressed, using sustainable private sector led approach in its implementation,” said Babajide. “We need to also organise new plantings for smallholders, especially youths and women and facilitate the development of improved seedlings, farm management services, agro chemicals, and fertilisers to increase productivity,” he added.
According to experts, oil palm has the capacity to produce more oil than any other oilseed crop. About 90 percent of palm oil is used in the production of foods, while the remaining 10 percent is used by the non-foods industry.
Food products like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil.
OWEDE AGBAJILEKE, Abuja & Josephine Okojie
