Ime Akpan
The governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has extended the bank’s intervention to the oil palm value chain given the fact that Nigeria spends about $500 million on palm oil importation annually despite the bank’s foreign exchange restriction to palm oil importers.
Speaking at a stakeholders’ meeting on Palm Oil Value Chain held in Abuja yesterday, Emefiele expressed sadness that the country was still importing palm oil despite sufficient arable land in the south-south and south-east regions of the country to farm it.
To address the problem, he pledged to grant a single-digit interest loan to players in that sector in order to stimulate massive production of the commodity.
He said the loans to be granted operators in the industry would be at and interest rate of not more than 9 per cent and would take into consideration the 3-5 years gestation period of the oil palm.
“As part of our Anchor Borrowers Program (ABP) and our Commercial Agriculture Credit Scheme (CACS), the CBN will 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.
“We will also work to encourage viable off-taker agreements between farmers and large-scale palm producing companies.
“We expect to develop a funding model that will take into consideration the 3 – 4-year gestation period required in cultivating palm oil,” he said.
He said his team had secured the buy-in of all the south-south and south-east region of the country, with a pledge of contributing at least 100, 000 hectares, each.
“All the states in the South-South and South- East regions have agreed to provide at least 100,000 hectares for the initiative.
“This programme is also expected to accommodate the small holder farmers,” he added.
Emefiele recalled that in the late 1950’s and 1960’s, Nigeria was not only the world’s leading producer of palm oil, but it was also the largest exporter of palm oil, accounting for close to 40 per cent of the global market share.
Currently, he said Malaysia and Indonesia were the top producers of palm oil and Nigeria the fifth, after getting their seeds and learning how to cultivate oil palm from Nigeria.
“We have also become a net importer of palm oil, importing between 400,000 – 600,000 metric tons of palm oil in order to meet local demand for this commodity.
“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.
“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 metric tons in 2014 to 302,000 MTs in 2017.
“This indicates that Nigeria still expends close to 500 million dollars 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,” he said.
The CBN governor put Nigeria’s current palm oil production around 800, 000 metric tonnes, per annum, down from its position in the 1950s and 1960s when it was the world’s largest exporter of palm oil, with close to 40 per cent of the global market share.
That position, Emefiele said had been lost to Malaysia and Indonesia with current production of about 25million and 41 million tons of palm oil, per annum, respectively.
The meeting was attended by the governors Udom Emmanuel, Pius Obaseki and Okezie Ikpeazu of Akwa Ibom, Edo and Abia states as well as the managers of Dangote Farms, Flour Mills, United Food Industries and Dufil Frima Foods Plc, among others.
In his remarks, Obaseki said the state was currently cultivating about 70,000 hectares of land of oil palm.
He also spoke on the need to revive the moribund Nigerian Institute For Oil Palm Research (NIFOR), in Benin to improve investment in research and production of quality oil palm seeds.
“We should understand that for meaningful investment to come into the oil palm industry, we have to think of other incentives to encourage manufacturers to turn oil palm to other things.
“What I mean is that palm oil can be used to manufacture margarine, soaps, toothpaste and other things.
“We must also think about how to create incentives for those who are currently in the business to explore all the uses of palm oil to create job opportunities for our people,” he said.
