Nigeria spends $500m on importation of palm oil ― CBN governor

A whooping sum of $500 million of the country’s scarce foreign exchange is presently being expended annually on the importation of palm oil, the governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele has disclosed.

Speaking yesterday in Benin City at the Plantation Owners Forum of Nigeria Oil Palm Discourse -Focus on CBN Smallholder Oil Palm Intervention, Emefiele lamented that the huge amount was aimed at meeting the demand gap of 1.25 million metric tons.

He also noted the country’s total domestic palm oil demand and consumption which stood at 2.5 million with local production capacity availing 1.25 million metric tons only, must change

The CBN governor called on state governors to help the country through access to land for oil palm cultivation so as to reverse the trend.

He said the primary objective of the gathering was to exchange ideas and garner support to revive the oil palm industry and its entire value chain through financing major, micro small and medium entrepreneurs and smallholders in the country.

“I am indeed excited that we have arrived at this juncture as in pursuance of the avowed objective of the administration of President Muhammadu Buhari to enhance economic diversification through agriculture. We will pave the way for greater and more endearing developments in respect of the development of the Nigerian oil-palm sector.

“This event today is germane in view of the realities and challenges of today’s economic environment, considering the need to diversify our monolithic economy from crude oil to productive sectors such as agriculture, which contributes over 20% to GDP and 36% to employment.”

According to him, the strategic potentials of the agricultural sector and its value chain in an economy, if well harnessed, has the potentials for rural employment generation, ensuring food security and foreign exchange conservation through reduced imports into the country.

The apex bank governor, further noted that of particular interest to all the stakeholders gathered here, is the current situation in the country’s oil palm industry, adding that oil palm is an important tree crop with immense economic importance as its products are important source of affordable edible and non-edible oils for domestic and industrial uses.

Emefiele said the Nigerian palm oil industry is at a crossroad, as its further growth and contribution to the national economy continue to be threatened by inadequate local production and continued reliance on imports.

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He said that the journey to revive the oil palm sector began with the discovery that over $500 million of scarce foreign exchange was being expended on the importation of palm oil to meet identified unmet demand gap of 1.25 million metric tons.

In addition to the above statistics, he said Nigeria’s total domestic palm oil demand and consumption stood at 2.5 million with local production capacity availing only 1.25 million metric tons.

“Faced with this stark reality, the CBN decided to intervene with a view to changing the narrative and in line with the ambitious attempt to reposition agriculture as the mainstay of the Nigerian economy. Furthermore, in our bid to restore the country’s pre-eminent status as the third global net exporter of palm oil, the Central Bank of Nigeria on 23rd June 2015 included palm oil and palm oil products alongside other commodities in the exclusion list of items not valid for foreign exchange at the Nigerian Foreign Exchange window.

“The dwindling fortune of the industry has been attributed to myriads of factors that accumulated over the years which were mainly attributed to the neglect of the agricultural sector in the wake of the oil boom, which has been exacerbated by the inherent structural deficiencies and potential risks associated with agribusiness in Nigeria. It is hard to believe that the country’s global market share in palm oil production fell from about 43% in the 1960s to just about 2% currently,” the CBN Governor declared.

On the positive side, Emefiele stated that CBN has noted the efforts of state governments in the palm oil-producing zones who pledged to make available 100,000 hectares of land in their renewed commitment to revive the production of this important commodity, stressing that of special note is the active participation of corporate entities, both local and multinationals who were matched to confirmed available lands from state governments and who, as part of their backward integration initiatives, are increasingly investing in palm oil and its value chain, especially at production levels.

Besides, he said the CBN, under its Oil Palm Development and Expansion Initiative, has so far disbursed over N30 billion to the oil palm sector which is painstakingly been monitored to ensure efficient and effective utilisation and maximum output.

He informed that the Central Bank of Nigeria, as a major stakeholder in the financial sector and indeed the economic development of the country, is set to render its unflinching support to the development of oil-palm by providing affordable long-term financing to out-growers.

“It is expected that other stakeholders will borrow a leaf from this commitment and play their respective roles to enable us to achieve our common goal and objective,” Emefiele said.

Edo State Governor Godwin Obaseki said the state government is already leveraging on development of oil palm production as God-given natural wealth to develop the state, noting that it presents thousands of opportunities apart from job creation, Industrial growth and other

The Special Adviser to Governor Godwin Obaseki on Agriculture, Prince Joe Okojie said the state has mapped out 120,000 hectares of land for oil palm cultivation in four local government areas of the state.

He listed the local government areas as Ovia Northeast, 25,329 hectares; Ovia Southwest, 36,759 hectares; Orhionmwon, 51,000 hectares; and Uhunmwonde, 6,912 hectares.

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