Nigeria Imports Palm Oil Worth N300 Billion in 5 Years Despite Forex Restriction, Scarcity

Despite adding palm oil to the foreign exchange restriction of the Central Bank of Nigeria (CBN) to encourage its local production, Nigeria spent N299.6 billion on the importation of the commodity between 2017 and 2022.

A new report from the National Bureau of Statistics (NBS) showed the commodity is often in the top five most imported agricultural products.

Despite the importation ban, Nigeria imported 302,000 metric tons of palm oil in 2017, according to CBN Governor, Godwin Emefiele. This is because current production levels cannot meet local demand, which averages three million metric tons per year.

Experts believe that Nigeria can do more because the country has the knowledge, land, climate, and history to succeed in palm oil production.

However, analysis shows that Malaysia is where Nigeria sources most of its palm oil, with N151.5 billion of the product imported during the period.

This is followed by India with N65.2 billion, Ivory Coast with N22.4 billion, China N20.3 billion, Singapore N20.6 billion, Indonesia N17.1 billionn, Columbia N1.4 billion, United States N727 million, Ghana N130.6 million, and Cameroon N4.26 million.

Historical records suggest that Nigeria had a fine collection of gen plasm—the oil palm planting material—that the world liked. Most of the palm oil then came from the wild groves, which were not planted because Nigeria had a natural grove of oil palm.

The Malaysians understood the need for a West Africa gen plasm and collected materials from the Nigerian Institute for Oil Palm Research (NIFOR) in the 1960s and mostly 1970s. Since then, Malaysia has become the world’s second-largest producer and exporter of palm oil after Indonesia.

On the other hand, Nigeria’s palm oil industry is mostly dominated by small-scale farm holders, which account for over 80 per cent of local production, while well-established companies account for less than 20 per cent of the total market, according to a report by PWC.

The two largest producers, Okomu and Presco, contribute largely to the market share, but the dominance of small farm holders in the palm oil market has resulted in low output compared to the country’s production potential.