The Central Bank of Nigeria recently reeled out measures to address challenges that had stifled the growth of the palm oil industry. Jonathan Eze writes that such intervention will support the country’s quest to diversify its revenue
Nigerians, especially palm oil farmers and investors heaved a sigh of relief last week when the Central Bank of Nigeria (CBN) announced a single-digit funding support for oil palm sector.
Prospective investors, both local and foreign, had at different fora identified the factors preventing investments in the sector to include, among others, difficulty in acquiring farmlands and the dearth of long term funding sources at affordable costs.
With this new intervention, the country is expected to take its vantage position as the largest exporter of palm oil as it were in the early 50’s and 60’s.
The central bank said the move was aimed at identifying “promising approaches” to revitalise the sector and enable the country regain its position as one of the leading global producers of palm oil.
Speaking during the meeting with the governors of the South-south and South-east states, the CBN Governor, Mr. Godwin Emefiele, noted that Nigeria still expends close to $500 million on palm oil importation annually.
He also said the CBN would in due course address challenges in the cocoa, cassava, beef/cattle ranching, dairy and fish sectors.
He said: “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, further disclosed that the central bank would work to encourage viable off taker agreements between farmers and large-scale palm producing companies, adding that loans would be granted through the Anchor Borrower Programme (ABP) and the Commercial Agriculture Credit Scheme (CACS) initiatives at not more than nine per cent interest per annum to identified core borrowers.
He said with an estimated three million hectares of land under cultivation, abundance of suitable arable land, the cooperation of state governments in the oil palm producing zone is desired to make land available to investors with proven financial and technical capabilities, who will be able to support developments of large scale palm oil plantations in the country.
He, however, disclosed that all the states in the South-south and South- east regions have already agreed to provide at least 100,000 hectares for the initiative, which is also designed to accommodate the small holder farmers.
The CBN boss also emphasised that the renewed focus to support improved growth in the agriculture and manufacturing sectors was “clearly in line with the federal government’s determination to diversify the base of Nigeria’s economy away from a reliance on crude oil, so as to insulate the economy from the vagaries and shocks associated with volatility in crude oil prices.”
He also reiterated the resolve of the bank to deal with unrepentant smugglers who are bent on frustrating its efforts to revive key sectors of the economy as well as create jobs for Nigerians.
He said: “Let me stress that we are not unmindful that our current focus to make life difficult for smugglers of the products being targeted under our intervention will be resisted by unpatriotic and recalcitrant beneficiaries of the status quo.
“We will not be deterred by their criticisms but will appeal to Nigerians to support these initiatives. No doubt, there will be initial pain caused by this new focus, but the medium and long run benefits remain unassailable and glorious for our dear country.”
The National President of the National Palm Produce Association of Nigeria, Henry Olatujoye, was elated at the news of the CBN intervention.
He urged all investors and palm oil farmers to seize the challenge and re-strategize to increase its market share in the global oil palm industry.
In the same vein, the Edo State Governor, Mr. Godwin Obaseki, made a case for the revival of the Nigerian Institute of Oil Palm Research (NIFOR) to strengthen the country’s capacity to produce quality, high-yielding seedlings and boost oil palm production.
He said the revival of NIFOR would improve investment in research and production of quality oil palm seeds. Noting that the state government had extended support to oil palm production companies in the state to boost production, Obaseki said Edo State was currently cultivating oil palm on about 70,000 hectares of land.
Also, the Country Representative of Solidaridad, Stephen Babajide, identified best agronomy management practice and yield intensification technology as key way to boost oil palm production in the country.
Speaking during a dissemination workshop on the Sustainable West African Palm oil Programme (SWAPP) in Abuja, he maintained that the country can quadruple its current production if oil palm producers are trained on how to adopt best management practice on their farms.
According to him the market potential for oil palm is very huge and can successfully replace crude oil if government is ready to give the commodity the same attention given to crude oil and cocoa production in the country.
Babajide, revealed that while about 80 per cent of oil production in Nigeria comes from small holder farmers, there are a lot of potential for development of the crop especially in the rural areas If government can give the necessary attention in that area, so as to help in creating employment for young people.
He further revealed that ‘about 50 percent of oil is lost during processing due to inefficient machinery used in processing, disclosing that Soilidarida through SWAPP have been able to provide oil producers in the focal states with cold pressing equipment that could bring their oil extraction rate from around nine per cent to 17 per cent’.
He also agreed that one of the ways Nigeria could emerge as a world leader in crude palm oil production was to adopt best management practices in its already established palm oil fields as these would help increase the national average yield per hectare, from about five tonnes to about 20 tonnes, maintaining that opening new fields could lead to deforestation and subsequently climate change.
He highlighted best management practices to include making circles around the palms, appropriate pruning, fertilizer, regular harvesting. He said they have been able to move the yield of the farmers they are working from 5-8tonne per hectare.
“Adopting this approach, we are able to get four times the volume of CPO we are getting from the same field without necessarily opening up new fields’, he explained.
The Enugu State Government too has keyed in into the oil palm revolution plan with its distribution of 20, 000 oil palm seedlings to farmers for upcoming planting season to enhance oil production and boost its Internally Generated Revenue.
Mr. Chijioke Egbo, the Head, Oil Palm Seedlings Distribution, Enugu State Ministry of Agriculture made the disclosure in an interview in Enugu.
Egbo, said seedlings that were ready for distribution were special improved species of palm oil fruit which would take only four years to mature.
According to him, the seedlings are ready to be distributed having stayed in the nursery site for a period of nine months which is the proper number of months for nursing oil palm seedlings.
The agriculturist said the government was ready for the distribution before now, adding that it was waiting for the rain to set in properly before the distribution to enable the seedlings to survive when planted by farmers.
He called on farmers not to be deceived by the first rain but wait till April for the proper rainfall to set in before embarking on full time farming.
Egbo, urged farmers who were interested in the seedlings to apply to the Enugu State Commissioner for Agriculture for approval as over 50 farmers had already indicated interest.
He said distribution of the seedlings was aimed at encouraging people to go into oil palm farming in the state and to boost local palm oil consumption and exports.
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