| Nigeria's once-thriving palm oil industry is often cited | | | | of things to several reasons. Besides conventional |
| as one of the most miserably failed economic | | | | uses in food-processing, every part of the tree has |
| opportunities in Africa. | | | | economic value that can be employed in a variety of |
| | | | | low-cost activities like roofing and wickerwork. |
| Use of the oil palm fruit to extract edible oil has been | | | | Moreover, palm oil is a source of raw material for a |
| in practice across the continent for centuries, and it | | | | whole range of industries; for instance, those |
| remains an essential ingredient in much of West | | | | involved in the manufacture of detergents, pomades, |
| African cuisine. Farmers in the region, who | | | | confectionary fat and margarine. By virtue of this |
| inter-cropped palm oil with other food crops like yam | | | | alone it offers massive scope for employment |
| and maize, started the first export trade early in the | | | | generation and income distribution, to say nothing of |
| nineteenth century. Before its close, the industrial | | | | other diversified products like palm kernel oil. The |
| revolution in Britain had created a huge demand for | | | | industry has therefore been widely regarded as a |
| palm oil, which by then had found its way to use in | | | | high-growth business by the private sector. In |
| candle making and as an industrial lubricant. The | | | | countries like Malaysia and Indonesia, which together |
| economic importance of palm oil grew steadily | | | | account for 90% of current global exports, palm oil |
| because of its high yield, leading European colonists to | | | | has proved to be a cornerstone of industrial growth. |
| start plantations in Central Africa by 1900. As palm oil | | | | |
| found wider use in food-processing and industry, | | | | For Nigeria, this dynamic crop represents an economic |
| global demand for the commodity surged. By 1982, | | | | asset of incredible potential. It also represents huge |
| worldwide palm oil exports had grown to a staggering | | | | opportunities for rapid SME development as a means |
| 2,400,000 million tonnes per annum. | | | | to economic diversification, poverty alleviation and |
| | | | | employment generation. The palm oil industry is |
| For most of this period, Nigeria held centre stage as | | | | unquestionably vital in Nigeria's plans for accelerated |
| one of the largest producers and exporters of palm | | | | growth and the establishment of a sustainable and |
| oil, accounting for more than 40% of global output in | | | | closely interdependent economy. Reinvigorating the |
| the 1950s. At the time of the country's independence | | | | industry can very well spark off the enterprise |
| from British colonial rule in 1960, palm oil contributed | | | | revolution that the country need to turn its fortunes |
| 82% of national export revenue. However, the oil | | | | around. Government intervention in this sector must |
| boom of the mid-seventies and the subsequent | | | | hence be guided by a number of critical |
| decline of farming proved catastrophic to the sector. | | | | considerations: |
| By the end of the twentieth century, the Nigerian | | | | |
| palm oil harvest had dwindled to just 7% of global | | | | - Maximising productivity in existing plantations so that |
| production. More embarrassingly, the once-largest | | | | scattered smallholdings can be converted into viable |
| exporter had turned into a net importer of palm oil, | | | | agricultural ecosystems. |
| sourcing 180,000 MT of the commodity from | | | | - Minimising cost of production by developing |
| international markets to meet local demand. | | | | high-yield varieties and improving efficiency in basic |
| | | | | processing and refining activities. |
| The fundamental flaw with the palm oil sector lies in | | | | - Creating effective backward and forward linkages |
| Nigeria's colonial origins, when British trade necessities | | | | for palm oil production and processing activities with |
| dictated economic policy. Because of its primary | | | | focus on the larger domestic economy. |
| export orientation at that time, planned expansion of | | | | - Directing investment at marginal farmers and |
| the industry was slow in coming through and its | | | | cooperatives that rely on wild groves or practice |
| future competitiveness had been compromised. As a | | | | mixed farming on small plantations. |
| result, the bulk of Nigerian palm oil comes from | | | | - Facilitating research and development, promoting |
| dispersed and semi-wild groves, and through the use | | | | public-private joint ventures and encouraging foreign |
| of highly outdated manual processing techniques. | | | | investment with tax breaks and financial incentives. |
| Several attempts to establish large-scale plantations | | | | - Revamping distribution and marketing networks to |
| since the 1960s - including the Cross River State plan | | | | export-orientated standards; entering bilateral |
| and the Oil Palm Belt Rural Development Programme - | | | | counter-trade agreements to avoid high tariffs and |
| ended in miserable failure. Currently, 80% of | | | | import restrictions. |
| production comes from scattered smallholdings | | | | - Ensuring compliance with international regulations on |
| spread over an estimated 1.6 million hectares of land. | | | | safety and quality of palm oil and processed products |
| In contrast, plantations occupy only about 300,000 | | | | through wider use of technology. |
| hectares - most of it coming up over the last decade | | | | - Implementing policies to address negative social |
| with private sector investment. | | | | development issues; for instance, promoting |
| | | | | backward migration from urban areas to plantations. |
| Economic reforms initiated since the reinstatement of | | | | |
| democracy in 1999 succeeded somewhat in nudging | | | | In 2008, the United Nations Organisation for Industrial |
| the sector out of stagnation. Between 2001 and | | | | Development (UNIDO) launched a $5 million |
| 2005, palm oil production grew rapidly from 760 MT | | | | programme to boost sustainable production of palm |
| to 800 MT, while recording a corresponding rise in | | | | oil in Nigeria and Cameroon. Although relatively small in |
| local consumption. Much of this movement can be | | | | terms of initial outlay, the project aims to train |
| owed to a ban that Nigeria imposed in 2002 on the | | | | farmers on more efficient methods of production and |
| import of palm oil and related products. However, the | | | | processing. Conservative estimates by UNIDO say at |
| government of Late President UM Yar'Adua reversed | | | | least a thousand news jobs will be created by the |
| the ban in January this year, prompting grave | | | | end of the four-year project. |
| misgivings about the fate of the industry and impact | | | | |
| on local production. The Plantation Owners Forum has | | | | Considering the extent of its resources and human |
| gone so far as to say the move would severely | | | | capital, Nigeria stands to reap much larger economic |
| threaten Nigeria's Vision 2020 goals for accelerated | | | | benefits from an optimally-expanded palm oil industry. |
| economic development. Inconsistent policies like this | | | | Before that happens, however, the government |
| are largely to blame for the fact that Nigeria's palm oil | | | | must realise that where overdependence on fossil |
| industry continues to flounder despite the marked | | | | fuels caused most of Nigeria's woes, another kind of |
| resurgence of agriculture through the last decade. | | | | oil holds the cure! |
| | | | | [1] The Cambridge World History of Food |
| Palm oil owes its significance in the Nigerian scheme | | | | [2] Indexmundi. |