Nigeria loses $10bn to non-production of palm oil -CBN

By Etuka Sunday

The Central Bank of Nigeria (CBN) yesterday disclosed how the country lost close to $10billion due to non-production of palm oil.

CBN’s Governor, Mr Godwin Emefiele who disclosed this at a Stakeholders Meeting on the Palm Oil Value Chain in Abuja said, alot of jobs would have also been created.

“If we had kept pace with our peers in supporting improved cultivation of palm oil, at the current global market price of $600 per tonne, and an assumed production level of 16m tonnes, Nigeria could have generated close to $10bn worth of foreign exchange for the country.

“This analysis does not take into consideration the amount of jobs that could have been created in our rural communities from large scale small holder developments,” he said.

Mr. Emefiele said, in the late 50’s and 60’s, Nigeria was not only the world’s leading producer of palm oil, it was also the largest exporter of palm oil, with close to 40% of the global market share.

“Today we are a distant 5th among leading producers of palm oil; we barely produce up to 3% of the global supply of palm oil, with estimated production of 800,000 MT of palm oil, while countries like Malaysia and Indonesia produce 25million and 41 million tonnes of palm oil respectively.

“We have also become a net importer of palm oil, importing between 400,000 – 600,000 MT of palm oil in order to meet local demand for this commodity,” he said.

The apex bank boss said, despite the availability of over 3m hectares of farmland for palm oil cultivation, production remains low at close to 2 tonnes per hectare, relative to a global benchmark of 25 tonnes per hectare.

This, he attributed to the maturation of existing palm trees, as some of these trees were planted in the 50’s, as well as low investment in replanting high yielding palm oil seeds. “As some of you may know, the usual life cycle for optimum palm production is 25 years,” he said.

The CBN’S Governor said, despite placing oil palm in the forex exclusion list, official figures indicate that importation of palm oil had declined by about 40 per cent from the peak of 506,000 MTs in 2014 to 302,000 MT in 2017.

“This indicates that Nigeria still expends close to $500 million on oil palm importation annually and 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,” he said.
Emefiele said, the Stakeholders’ Meeting for resuscitating Palm Oil sector, which is vital to Nigeria’s growth objectives as a nation, and efforts at creating jobs for Nigerians was apt, as it was able to bring together key players across the palm oil value chain, state governments, banks, and officials of the CBN, in order to examine the challenges faced by palm oil operators.

“We also hope to identify promising approaches that will help in revitalizing this key sector and also enable Nigeria to regain its position as one of the leading global producers of palm oil,” he said.

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