CBN, govs collaborate to revive $10bn oil palm industry

The Federal Government’s Plansto revive the nation’s $10 billion oil palm industry got a boost on Monday, as the Central Bank of Nigeria (CBN) and some South East, South-South governors have agreed to provide 100,000 hectares of land to grow improved seedlings of the product.

This was as the CBN Governor, Godwin Emefiele, picked holes in the remarks by the Lagos Chamber of Commerce and Industry (LCCI) that the recent removal of textiles importersfrom the forex eligibility list would threaten the N5 trillion industry.

According to him, the domestic textiles industry was on the path of revival with the blocking of importers from accessing foreign exchange and making Nigeria a dumping ground for all matters of textiles.

Speaking at a meeting with the governors and other stakeholders in the oil palm value chain, Emefiele lamented that Nigeria still spends $500 million on oil palm importation annually despite being the largest producer and exporter of the product in the 50’s and 60’s, controlling close to 40 per cent of global market share.

He said: “Today we are a distant 5th among leading producers of palm oil; we barely produce up to 3per cent of the global supply of palm oil, with estimated production of 800,000 MT of palm oil, while countries like Malaysia and Indonesia produce 25 million and 41 million tonnes of palm oil respectively. We have also become a net importer of palm oil, importing between 400,000 – 600,000 MT of palm oil in order to meet local demand for this commodity. Despite the availability of over 3m hectares of farmland for palm oil cultivation, production remains low at close to 2 tonnes per hectare, relative to a global benchmark of 25 tonnes per hectare. This is as a result of the maturation of existing palm trees, as some of these trees were planted in the 50’s, as well as low investment in replanting high yielding palm oil seeds.

“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 16million tonnes, Nigeria could have generated close to $10billon worth of foreign exchange for the country. “This analysis does not take into consideration the amount of jobs that could have been created in our rural communities from large scale small holder developments.

“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. This indicates that Nigeria still expends close to $500 million on oil palm importation annually and we are determined to change this narrative. 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”, Emefiele explained.

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