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Unlocking palm oil’s $10bn export potential

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By Usman Oladimeji

Several initiatives have been kickstarted by govt and stakeholders.

Industry stakeholders are mobilizing efforts to revive Nigeria’s Palm Oil industry with the goal of tapping into its $10 billion Export potential. This dedication is multifaceted, with government agencies, private investors, smallholder farmers, and industry professionals all playing a part in the coordinated endeavor to restore the country’s position in the world market for palm oil. Nigeria, a historical leader in palm oil production, currently ranks 78th in the world, importing $372 million worth of palm oil annually and exporting only $1.34 million. A research recently released by Vestance titled “Reclaiming Lost Glory: Nigeria’s Palm Oil Renaissance,” highlighted significant prospects in the industry.

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Razaq Fatai, the lead researcher for the report, stated that Nigeria’s production of palm oil has decreased since the civil war that raged from 1967 to 1970. He emphasized the necessity of reinvesting in underutilized plantations in order to boost export earnings. During the launching event of the research, industry experts emphasized strategic initiatives to increase productivity. The general director of SWAgCo, Dr. Adewale Onadeko, promoted an agro-industrial cluster approach that integrates infrastructure, including storage, processing facilities, and Farmer support, within a 25-kilometer radius. Dr. Bayo Ogunniyi from the International Fund for Agricultural Development, stressed the necessity of new extraction methods, high-yield seeds, and better access to financing for smallholder farmers, who presently use inefficient machinery.

Nigerian government is promoting domestic production.

Ramses Najem, CEO of BulkDirect, emphasized the value of establishing processing plants near fields in order to minimize logistical challenges and provide small-scale farmers with necessary supplies. There is currently a major disparity between output, imports, and consumption in the sector. Around 1.34 million metric tons of palm oil are consumed locally each year, exceeding Nigeria’s yearly production of about 1 million metric tons. As a result of the production-demand imbalance, the country now imports around 500,000 metric tons of palm oil annually, mostly from Indonesia and Malaysia.

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Notwithstanding this shortfall, there is enormous room for growth, especially considering the anticipated rise in the demand for palm oil globally in the upcoming years. Nigeria can also leverage the growing demand opportunity from international markets for palm oil substitutes made in Southeast Asia as a result of environmental issues and Deforestation to increase export. Several initiatives have been kickstarted by the Nigerian government and Private Sector stakeholders to revive the industry and take advantage of this chance. The government is promoting domestic production and decreasing dependency on imports by enacting regulations that limit importers of palm oil’s access to foreign exchange.

Domestic and foreign investors are engaging in the industry.

Additionally, initiatives like the Anchors Borrowers’ Program of the Central Bank of Nigeria are crucial as they provide smallholder farmers and regional producers with both financial and technical support. These projects seek to boost local capacity and yields in order to satisfy both home needs and export potential. State governments have demonstrated their dedication by collaborating with private sector Investors to build expansive plantations and processing facilities in regions like Edo, Cross River, and Ondo.

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Private investors—both domestic and foreign—are also engaging in the industry in recognition of its long-term profitability. Experts in Economic Development and Agriculture are upbeat about Nigeria’s potential in the industry, nevertheless they noted that a number of actions are necessary to fully realize this potential. They stress that in order to stay competitive in the long run in the global market, infrastructural development, improved supply chain management, and sustainable farming methods are essential. Another top priority is improving Nigeria’s legislative and policy framework to encourage sustainable palm oil production.

Related Article: Palm oil imports cost Nigeria ₦94b yearly

Regaining Nigeria’s status as the world leader in palm oil will take concerted efforts but the potential benefits are substantial. The nation has the ability and is well positioned to exploit the industry due to its rich environment that is perfect for cultivating. This would not only strengthen the national Economy but also open up opportunities for economic diversification. If Nigeria maintains its agricultural sector assistance, Infrastructure investment, and promotion of sustainable practices, the $10 billion potential for palm oil exports is attainable. By doing this, Nigeria can harness its natural resources to build a prosperous business that boosts the country’s economy.

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