The State of Nigerian Oil Palm Industry TodayAbbakin
The state of Nigerian oil palm industry today is a case of a country that has woefully failed to manage it natural resources. This also applies to the neglect suffered by the agriculture sector in Nigeria, which once served as the mainstay of the country’s economy.
Before the crude oil discovery, Nigeria was once the world’s leading producer of palm oil, but going by what is on ground now, the country has become a major importer of the same product which is so important in food cooking and also used as industrial raw material in local Africa communities.
Available reports show that the current domestic palm oil production in 2016 stands at 970,000 metric tons per annum, while consumption (or demand) is put at 2.7 million metric tons yearly; against the official figure of 1.57 million metric tons.
Nigerian is now one of the highest importers of oil palm which stood at 552,000 million metric tons. This means that despite the scarcity of foreign exchange, the country has to get the shortfall in oil palm demand in Nigeria through importation; spending up to N116.3 billion yearly.
This is indeed a tale of “from Grace to Grass” that Nigeria: which was once controlling the global market share of 43% with 82% of its export earnings coming from oil palm production in the early 60s is now shamefully contributing only 2.9%; just 7% of global palm oil production over the years.
This is rather unfortunate for a country endowed with the right climate weather and soil conditions suitable to the growth of oil palm plantations. It implies also that the nation cannot even produce for its domestic consumption let alone the need to export palm oil to other countries of the world.
For example, Indonesia and Malaysia which was believed to have borrowed the palm fruit from Nigeria years back is now the world’s largest producer of oil palm produce, followed by Thailand and Colombia, thus leaving Nigeria in the fifth position.
Just like the cocoa production in Nigeria prior to the discovery of petroleum in commercial quantity, Nigeria was the global power in cocoa cultivation and export, next only to Ghana. Today, Ivory Coast leads the world in cocoa production, followed by Indonesia, Brazil and Ghana; while Nigeria is nowhere to be found.
While some have argued that the 1967 to 1970 civil war might have affected the Nigerian oil palm industry, the main palm oil producing states in Nigeria are Delta, Edo, Akwa-Ibom, Cross River, Bayelsa, Rivers, Anambra, Enugu, Imo, Abia, Ogun, Ondo, Oyo and Ekiti state.
Today, the famous groundnuts pyramids have perhaps vanished from Kano, while the cultivation of cotton has been abandoned in the absence of a thriving local textile industry in Nigeria. As the country has chosen to depend solely on crude oil, rubber production is also nowhere to be found.
It is therefore no doubt that Nigeria has failed to take full advantage of the economic areas in which she has the comparative advantage; making it difficult for the country to achieve her target of diversifying the economy from the current oil and gas sector.
This situation has continued and will continue to put the economy on its knees always in any events of crude oil prices fluctuation in the international market. This ugly situation has to change if the government will encourage local productions rather than focusing on the ban of importation of the product, and collection of custom duties and taxes.
Furthermore, if the Nigerian economy is to become stable and sustainable, then there is the need to look at these areas of critical demand. The government and agricultural development organizations have to come up with innovative policies to encourage a return to agriculture to produce oil palm among other cash crops.
This will also include making positive efforts to rehabilitate environmental impact on rural farmers and address issues of shady land acquisitions by government machinery.
Investors and oil palm companies who have found need for investment in the oil palm sector are encouraged to understand the legal instruments, which include the Land Use Act (1978), the Environmental Impact Assessment Act (1992), and also seek access to improved high yielding seedlings.
Generally, oil palm plantations and agricultural cultivation and processing serve as means of livelihood for many rural families in Nigeria. It also increases government foreign exchange earnings, reduce greenhouse effect, and can create millions of jobs for out teaming young population.