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Scandalous! -The Nation Editorial

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•Nigeria has no business importing palm oil with scarce forex 

The report that Nigeria spent a whopping N116.3 billion ($323.1 million) in the first 10 months of this year to import palm oil yet again exemplifies the paradox of a country that perennially shells out scarce foreign exchange to import commodities that it is well endowed to produce for export. From being the largest producer of palm oil in the world with a market share of 43 per cent in the 1960s, the story is that Nigeria currently ranks at the bottom among palm oil producers, accounting for a miserable world share of 2.9 per cent.

That is not all: of its domestic demand of 2.7million tonnes, it is, at the current level of production, only able to muster a total of 970,000 metric tonnes – a mere 35 percent – leaving a huge shortfall of 1.73 million tonnes. By comparison, its peers like Indonesia produces 33 million metric tonnes; Malaysia, 19.8 million; Thailand, two million and Colombia, 1.108 million. The three are said to account for nearly 80 percent of the global palm oil trade.

What makes the story truly tragic is that the country’s romance with palm oil trade actually predated the colonial era. In fact, it was among the first commodities of international trade between the vast territories making up southern Nigeria and Europe after the slave trade. It played no less significant role at the turn of the 20th century, right up to the Second World War when exports from the British West African countries accounted for about two-thirds of the world palm oil trade. Juxtaposed with the countless fables that have been spawned about the Nigerian origin of the Malaysian palm oil seedlings (although this has been proven to be improbable), the situation can only be described as scandalous.

The situation should not be allowed to continue. The Federal Government must do everything in its power to reverse the trend and urgently too. More than half a century after industrial giants like Unilever and Paterson Zochonis – leading users of the commodity – opened shop in the country, that its manufacturing processes is still locked on importation can only be explained by short-sighted policies of the past years, all of which have denied the country the fruits of backward integration and the benefits of industrial optimisation.

To imagine that the country has, for more than five decades, maintained a flagship research institute – Nigerian Institute For Oil Palm Research (NIFOR) to research various aspects of its production and its utilisation makes it worse.

While palm oil may not necessarily rank on the same scale of priority with say, a food crop like rice (and we do not see why it should not) which the Federal Government has been pushing with fervour, it seems to us that at a time the country is seeking every avenue to conserve foreign exchange, to create jobs, particularly in the agricultural value chain, and to get local businesses to utilise local raw materials, the least the Federal Government can do is push aggressively to ensure that a commodity like palm oil receives its fair share of policy support. This is much more so that Nigeria enjoys immense comparative advantage in its production and it is also a potential foreign exchange earner.

We say this because, multiple investments in plantations and processing over the last couple of years in notably Cross River and Edo states have raised the stakes on the scale of what is achievable. What remains is for the Federal Government to upscale such policies, particularly the fiscal incentives to encourage investors across the value chain, all with set goals and clear timelines as was done for rice. And just as in rice production in which substantial progress has been recorded in a relatively short period, we have no doubt that progress is achievable given its relatively short gestation cycle. Nigerians cannot wait to see concrete programmes put in place to bring about this; that will be one practical move to end the generational whining over so-called palm seedlings from Asia.

The Nation

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