Recently, Otunba Gbenga Daniel, a Senator of the Federal Republic of Nigeria and a former Governor of Ogun State granted an interview which went viral. What actually concern this article is the area where he ‘recommended’ that we should only consume what we produce, or we should not import what we can produce locally. Some people have been quick to condemn his views; insisting that he is one of the ruling elites responsible for the woes betiding Nigeria, others says it is sheer populism.
To me, the advice is timely, simple and implementable and perhaps the most resonating with reasonable people presently.
To make sense of it, l have chosen to take a product that we produce and consume in Nigeria but sadly we dropped the ball as our population grew and now we largely import it. It is none other than the common red palm oil.
As we all know, palm oil is a versatile product that has a wide range of uses. It is used in cooking, cosmetics, and industrial applications.
In Nigeria, palm oil is a major ingredient in many traditional dishes. It is also used to make soap, candles, and other household products. In other words, palm oil is a ‘repeat purchase’ product, meaning that it is strategic to our economy.
So, what is the situation on the ground in regards to the amount of palm oil we import for consumption?
First we must look back at what happened over the years in order to see the future in this matter.
Before the 1960s, Nigeria was the world’s leading producer and exporter of palm oil, with significant palm plantations in various regions.
The oil palm tree (Elaeis guineensis) is native to West Africa, including Nigeria, and has been a traditional crop in the region for centuries.
The palm oil industry played a crucial role in Nigeria’s economy, providing employment for millions of people and contributing significantly to the country’s foreign exchange earnings.
Fast forward to 2021, Nigeria imported 568 million USD worth of palm oil, of which 365 million USD or 40% came from Malaysia.
According to Businessday, Nigeria imported 227, 035 metric tons of palm oil from Malaysia in 2022.
Alarmingly, between January and April 2023, it has increased to a whooping 92,961 metric tons (MT) from 20,513 MT in the corresponding period of 2022; a mammoth jump of 72,448 MT.
As in any bad situation, there are major and minor actors on the stage and the era of importer and exporters became fiendish in earnest.
But who are the beneficiaries and who are the losers?
Some of the major players in the palm oil trade between Malaysia and Nigeria include the Malaysian Palm Oil Council (MPOC), the Nigerian Palm Oil Association (NPOA), and the Wilmar International Group.
Others include Sime Darby Plantations, IOI Corporation
Genting Plantations, and Golden Hope Plantations.
What is most unfortunate and aptly mentioned in Senator Daniel’s submissions is that the exporters continue to prosper in job creation and wealth accumulation at our own expense. For a good example, Wilmar is a Singapore-based company and it is one of the world’s largest palm oil producers and traders doing business with Nigeria. Obviously , Malaysia, Singapore, and Ivory Coast and their agents in Nigeria are the overall beneficiaries. Multi-millionaires had been made of them and thousands of job had been created to the benefit of the exporters.
And, clearly, it is the Nigeria’s economy that has continued to suffer especially with the attendant massive unemployment at 33% and the continuous hemorrhage of the external reserve as in debt servicing.
So, what exactly led to the decline in production?
Several factors contributed to the decline of Nigeria’s palm oil industry, here are chiefs:
*Neglect of Plantations: After gaining independence in 1960, the focus shifted away from agriculture towards the booming oil industry. The palm oil sector suffered from neglect, with many plantations abandoned or poorly managed.
*Rapid Urbanization:
The migration of rural populations to urban areas led to a decline in palm oil farming and production, as people sought other livelihood opportunities.
Keke Marwa and Okada motorcycle provide daily income and that created a bandwagon effect drawing able bodied men from the rural areas.
*Low Productivity:
Outdated farming techniques and inadequate investment in research and development hindered productivity and competitiveness.
*Competition from Other Oils:
The popularity of cheaper vegetable oils like soybean and sunflower oil reduced domestic demand for palm oil.
*Inconsistent Government Policies:
Changes in government policies and lack of long-term planning impacted the industry’s growth and stability.
In contrast to Nigeria’s lackadaisical approach to palm oil production, Malaysia has invested heavily in its palm oil industry.
The government has provided subsidies and other incentives to palm oil growers, and it has also built infrastructure to support the industry, such as roads and ports.
As a result, Malaysia is now the world’s largest producer of palm oil.
Ironically, it was the decline of Nigeria’s palm oil industry, that charged up Malaysia to put on the right policies that helped her to emerge as a global palm oil powerhouse and a major exporter today. Malaysia’s success can be attributed to various factors:
a. Agricultural Policies: Malaysia implemented focused agricultural policies, providing support and incentives to palm oil farmers and processors.
b. Research and Innovation: Significant investments were made in research and development, leading to improved palm oil varieties and farming techniques.
c. Export-Oriented Approach:
Malaysia aggressively promoted its palm oil in international markets, building trade partnerships globally.
d. Scale and Efficiency: Malaysia’s large-scale plantations and efficient processing facilities boosted production and export capabilities.
e. Government Support:
The Malaysian government actively supported the palm oil industry, ensuring stable policies and a conducive business environment.
If it seemed a high risk to swallow the pills prescribed by Senator Daniel, we can take into consideration the revelation of adulteration of imported palm oil made on the 3rd of July by the National Palm Produce Association of Nigeria (NPPAN).
According to the president of the association, Mr.Alphonsus Inyang, “the Federal Government should collaborate in establishing and installing testing and grading equipment to ensure a comprehensive examination of all oil brought in for sale.”
According to Mr Inyang, the introduction of grading measures would allow for the differentiation of Technical Palm Oil (TPO), Special Palm Oil (SPO), and Crude Palm Oil (CPO).
This initiative would position Nigeria as a frontrunner in palm oil grading regulations.”
While l appreciate the move by NPPAN, methinks producing what we consume should be ultimate. And my thoughts are borne out and encourage by the palm oil production efforts of Gov. Obaseki led Edo government.
Indeed every state in Nigeria should copy what Edo and Ondo State is doing about palm oil production in recent times.
Presently, the Edo State government is cooperating with the Central Bank (CBN) and Plantation Owners Forum and Small Scale farmers to de-risk investment in palm oil development through an initiative named Edo State Oil Palm Program (ESOPP).
Resultantly, Fayus Inc., a major investor under the Edo State Oil Palm Programme (ESOPP), has commenced harvest on one of its plantations measuring 1,200 hectares in Ewan-ISI in Uhunwonde Local Government Area of Edo State.
The alleged adulteration of palm oil can be very frightening in the least.
The main remedy open to Nigeria is to declare a state of emergency on development and production of palm oil. Here are some educated thoughts and suggestions of good intentioned Nigerian on reviving the palm oil industry
a. Increased Investment:
The government should invest in the rehabilitation and modernization of all existing palm oil plantations and encourage private sector participation.
b. Research and Development:
Funding should be allocated to research institutions and agricultural colleges to develop improved palm oil varieties and sustainable farming practices and increase the numbers of agricultural graduates within the next four to five years.
c. Smallholder Support: Empower smallholder farmers through training, access to credit, and incentives to increase productivity.
This could be done in form of low-interest loan or grants to cooperative societies and it will be in line with the President Tinubu and APC manifesto.
d. Infrastructural Development:
Improve transportation and processing infrastructure to reduce post-harvest losses.
e. Create a favorable business environment. The government could create a more favorable business environment for palm oil companies by reducing taxes and regulations. This would make it easier for companies to invest in the industry and expand their operations.
f. Promote palm oil consumption:
The government could promote palm oil consumption by educating consumers about the benefits of the product as opposed to other imported oils.
This could be done through public awareness campaigns or by offering subsidies on palm oil products.
Finally, in regards to the mantra that ‘we should produce what we consume’, the steps l have researched are very doable.
Nigeria can regain its position as a major producer and exporter of palm oil. This would boost the economy, create jobs, and reduce Nigeria’s reliance on imports and also avert health dangers in adulteration of palm oil.
