Churchill Oboh, acting team lead, Edo State Oil Palm Programme (ESOPP), in this interview with BusinessDay, speaks on Governor Obaseki’s commitment to lead the charge in oil palm development in Nigeria, sustain its production and attract a host of investors into the sub-sector. Churchill Okoro brings excerpts:
What is the Edo State Oil Palm Programme (ESOPP) all about?
The Edo State Oil Palm Programme (ESOPP) is an initiative of the Executive Governor of Edo State, Godwin Obaseki, which is aimed at diversifying the economic base of the state by de-risking the oil palm sub-sector to create jobs, improve livelihoods, contribute to forest management and restoration.
In achieving this, the state has leveraged on its comparative advantage of being within the oil palm belt in Nigeria. Similarly, at the launch of the programme, in partnership with the private sector, an independent implementation office was created to handhold the investors through their investment journey in the state.
Since its inception in 2019, how has this programme rejuvenated the oil palm sector for global competitiveness?
As you may be aware, production in the oil palm sector for Edo State isn’t just about making land available for oil palm production but critical for us is the sustainability of the production. Let me also use this medium to say that the thematic pillar of the ESOPP is the “PPR” approach, which stands for Produce, Protect and Rehabilitate.
In the world today, there are concerns about the environment and the need for all hands to be on deck to address these concerns. Similarly, there is a notion that oil palm is a driver of deforestation, well, I can tell you that the reverse is the case here as the State Governor is changing the narrative by addressing these concerns with laws and policies to guide production in the state.
The Oil Palm Programme is already positioning the State in the global map, not just for sustainable production of oil palm, but for reforms in the forestry sector
Today, through the sustainable programme, all oil palm companies are mandated to comply with the Round-Table on Sustainable Palm Oil (RSPO) Standard which includes, preserving biodiversity, protecting forests and peatlands, reducing greenhouse gas emissions, respect for workers rights and safe working conditions and land rights among others. As we speak, there is a bill before the House of Assembly which will legally back these sustainable practices in the sector.
Additionally, the State has fully adopted the Free Prior and Informed Consent in engaging stakeholders prior to any activity or investment in the state. I make bold to mention that the ESOPP programme is the game changer and will rejuvenate the oil palm subsector in the country with about 70,000 hectares so far allocated for production and about 40,000 hectares to go as phase two.
You may be conversant with the gestation period of oil palm as such, the dividends in terms of yield from the production will be felt in about three years from today. This is because of the different activities that our investors need to carry out prior to commencement of planting activities.
The Obaseki-led government has assured to add over 1million metric tons to local production of Crude Palm Oil (CPO) by 2030. How feasible is this and what are the things put in place to meet or surpass the target?
The figure is very feasible with the size of land. The Governor is committed to making it available for production as well as the quality of planting materials the investors are looking to cultivate and are cultivating. However, certain environmental factors like the amount of rainfall can not be taken for granted but I am optimistic that with the perfect weather conditions, reform in the sector as we are currently experiencing in the state, will help achieve our goal.
Few years ago, the state launched the N69bn-Edo State Oil Palm Programme (ESOPP) in partnership with the Central Bank of Nigeria (CBN). Has this program been able to open up the space for large-scale commercial farming in the oil palm sector?
Yes, indeed. I will buttress this by giving a little information about some of our investors and the size of land so far allocated to them through the ESOPP. The Governor of Edo State has allocated lands for large-scale commercial farming in multiples of 5,000 and 10,000 hectares to both indigenous and foreign agro-investors like Agro-allied Resources and Processing Nigeria Limited (Dufil), AgriPalm Ltd, a subsidiary of Flour Mills Nigeria Plc, Saro Oil Palm, Bragav Nigeria Limited, Saturn Farms among others. These investors are currently at different stages of development at their respective lands.
It is true that the former CBN Governor during the launch of the ESOPP stated that the CBN has earmarked the sum of N69bn to support the ESOPP. However, this fund can only be accessed through the Deposit Money Banks (DMBs) and, of course, you know what that means that the funds was at no time given to the government of Edo State as it is wrongly believed and propagated by mischief makers.
How many investors have been encouraged by the program to commit to investing in the sector?
So far, we have a total of 10 small, medium and big investors in the state under the programme with land size ranging from 200 hectares to 12,000ha.
Similarly, the governor has approved the allocation of 2,000 hectares being the first phase for the commencement of the ESOPP schemed small-holder programme in the State. The beneficiaries of the programme will be drawn from around the state, and this is aimed at improving the livelihoods of the people of Edo State through agriculture, and production will be sustainably driven in line with RSPO standard.
No doubt, since this program commenced in 2019, it has recorded a number of investors. What is the value of the investments in the oil palm sector?
The investors under the ESOPP will be investing between the sum of $7,000 to $8,000 per hectare, and this also includes infrastructure cost and many others. So, if you multiply that with the number of hectares that has been allocated for production that will tell you the kind of funds that is being and will be injected into the state’s economy as well as the multiplier effect in years to come.
The state government has, over the years, assured to create an enabling environment for potential investors. As of 2023, how many hectares of land has been provided for oil palm development in the state?
Exactly, Edo state ranks tops amongst other States in the Ease of Doing Business in Nigeria it’s no surprise at-all based on the calibre of the leadership of the State. As of 2023, the Governor has allocated a total of 2,000 hectares to independent smallholders in the state. Well, during the course of the year, the Governor will likely allocate more to commence the phase 2 of land allocation but, as you know, it is totally the prerogative of the Governor to do so.
What is the duration of the ESOPP and how many job opportunities will it create?
Oil palm is a long-term plantation agriculture that will take between 25 and 30 years before replanting is done. The C-of-O was issued for 25 years with an automatic renewal for another 25 years. For the job opportunities, these are grouped into direct and indirect as well as the value added to SMEs in the communities.
Ideally, you will require four workers in a hectare of oil palm direct labour, that number can double for indirect labour and this is dependent on the type of activity in the farm. For the value added to businesses are immeasurable as this has a great impact on the economy of the communities.
There are a wide range of activities across the value chain, which should give you an insight of the numbers we will be talking about in few years to come.
Could this programme position Edo State as a leading state in plantation development and oil palm production on Africa’s continent?
The Oil Palm Programme is already positioning the State in the global map, not just for sustainable production of oil palm, but for reforms in the forestry sector.
In 2015, Edo State became the only sub-national to sign the Marrakesh Declaration for responsible oil palm production and forest management. Also, the state became a partner of the Tropical Forest Alliance amongst other 10 West and Central Africa countries namely Cameroon, Central African Republic, Côte d’Ivoire, Democratic Republic of Congo, Edo State (Nigeria), Gabon, Ghana, Liberia, Republic of Congo and Sierra Leone; to produce oil palm responsibly.
These countries account for 25% of the world’s tropical forest and 75% of Africa’s forests. Consequently, the Africa Palm Oil Initiative was formed. The Africa Palm Oil Initiative brings together governments from ten countries in West and Central Africa with the private sector, traditional leaders, local communities and Indigenous People.
Significantly, in the year 2022 at the United Nations Climate Change Conference held in Sharm El-Sheikh, Egypt, the former Honourable Minister for Environment, Mohammed Abdullahi, signed the Africa Sustainable Commodities Initiative on behalf of Nigeria.
It emphasized the work done by Edo State and the interconnecting nature of oil palm and forestry sectors and the ambition to extend adoption of the principles of the Africa Sustainable Commodities (ASCI) to other states in Nigeria. The gains of the APOI now ASCI are enormous and need to be sustained.