CEM REPORT, AGROFOOD | Palm Oil production in Nigeria has fallen below demand leading to a ₦500 billion annual expenditure on Importation of the product.
Nigeria’s annual demand for palm oil currently stands at 3 million metric tons, while annual production remains low at 1.4 million metric tons, leaving a 1.6 million metric tons production gap which is covered by import.
To bridge this gap stakeholders in the palm oil production subsector have called for a national oil palm development policy to boost production.
Celestine Ikuenobe,
Celestine Ikuenobe, former executive director of the Nigerian Institute for Oil Palm Research (NIFOR) at the National Policy Dialogue titled: ‘Achieving an economic and social-ecological resilient palm oil sector in Nigeria’ said that a policy to preserve land for palm oil cultivation is necessary to boost production.
He said while national production has increased, it is not sufficient to meet demand as the nation’s population has grown beyond the local production capacity, noting that Nigeria has less than 800,000 hectares of cultivated oil palm as compared to 16.3 million hectares in Indonesia and 5.6 million hectares in Malaysia.
“So you cannot compare that, even our wild groves, which we used to estimate to be about 2.1 million hectares in the 90s far less than that now with urbanization, cutting down of trees, so you cannot get more from the wild as you get from the cultivated system.”
“We are still producing palm oil in Nigeria, we produce more than what we used to produce before, but the population has grown in Nigeria and we are getting palm oil from the same amount of land and amount of growers as before.
“In those days, we produced enough, and we could export because the uses internally were not as much as it is now, there was no noodle industry, but they exist now and require palm oil, and you know we produce more soap now than we used to produce in the 90s.
“Our population has grown tremendously, and areas that were under wild groove are now cut down, they are now cities, so those wild grove palms are no longer available, people are not even harvesting them, but now that we are cultivating plantations, they don’t even have much of cultivated plantations,” he said.
Recently, joint committees on Finance, National Planning and Economic Development and Aid, Loans and Debt Management recommended a complete ban on the import of items that can be locally produced in the country.
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The recommendation which was on the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), stressed that the Central Bank of Nigeria should provide foreign exchange to banks to discourage parallel market patronage.
“that all items locally produced should be out rightly banned from importation and customs tariffs amended accordingly”
While this is a step in the right direction, the report failed to consider products like palm oil which Nigeria produces but not in sufficient quantity to serve the nation. If a ban is implemented such products will become limited in supply creating a smuggling market.
While the federal government is considering ways to promote locally produced goods, it may need to create policies to boost the production of these goods and also prevent overpricing and monopoly. Also, the quality of 9f production may need to be brought into consideration.
