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Sustained by the need to spread the economy, the Central Bank of Nigeria (CBN) has unveiled brand new plans to revitalize the palm oil sector so that it can spawn foreign exchange and create employment. This initiative is part of its intervention programmes in the agricultural sector of the economy.

Sustained by the need to spread the economy, the Central Bank of Nigeria (CBN) has unveiled brand new plans to revitalize the palm oil sector so that it can spawn foreign exchange and create employment. This initiative is part of its intervention programmes in the agricultural sector of the economy.

According to the CBN governor, the new initiative is aimed at identifying promising approaches to revitalize the sector and enable Nigeria regain her former position as one of the world's leading producers of palm oil. Statistics from the CBN show that Nigeria spends almost $500 million annually on palm oil importation. This is ironical, considering the fact that countries like Malaysia, Thailand, Indonesia and Columbia that used to import palm oil seedlings from Nigeria in the late 1950s and 1960s are now world's leading producers and exporters of the produce.     
Today, Nigeria is a distant fifth among leading producers of palm oil. She barely produces three per cent of the global supply of palm oil, with estimated production of 800,000 metric tons, while countries like Malaysia and Indonesia produce 25 million and 41 million tons of palm oil, respectively. Currently, Nigeria is a net importer of palm oil, importing between 400,000 and 600,000 metric tonnes annually to meet local demand for the commodity. In spite of the availability of over 3 million hectares of farmland for palm oil cultivation, production remains low.                  
We, therefore, support the move by the CBN to change this narrative. According to the apex bank, its policy direction in palm oil sector will include supporting improved production of palm oil to meet not only the domestic needs of the market, but also increase exports, thereby improving Nigeria's foreign exchange earnings. The CBN will work hard to encourage viable off taker agreements between farmers and large-scale palm producer companies in the country. Loans will be granted through the Anchor Borrowers' Programme (ABP). Under the ABP, the apex bank places emphasis on seven agricultural products – rice, cocoa, cashew, sesame seed, palm produce, maize and cotton. For now, palm produce is receiving priority attention in the agricultural diversification value chain, after rice production received great attention via the ABP that kicked off in Kebbi state.    
It is cheering that the South-south and South-east governments have agreed to provide at least 100,000 hectares of land for this initiative, which is also designed to accommodate the smallholder farmers. However, about three million hectares of arable land is the ultimate target for investors with proven financial and technical capabilities to support the development of large-scale palm oil plantations across the country. The renewed focus on oil palm sector driven by the CBN is the larger vision of the present administration to support improved growth in the agricultural and manufacturing sectors. For this vision to be realized, investors and farmers will have access to loans at single digit as promised by the CBN.
Although the economy has recorded marginal investments in the palm oil value chain in recent years, they fall short of expectations. Therefore, the Federal Government and governors of the South-south and South-east states should work as partners in this project. Altogether, to achieve its dream to revive the oil palm sector, government must address the problems that led to the stifling of the sector. Government must also address the problem of acquiring farmlands and long-term funding sources at affordable costs. If the oil palm sector is revived, Nigeria is likely to earn about $10 billion worth of foreign exchange at its present global market price of $600 per tone and an estimated production level of 16 million tones. Every effort by the government to revive the oil palm industry in the country should be encouraged.

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