In 2007, I was partly involved in writing a proposal for the revival of the Adapalm, owned by the Imo state government. Adapalm is located in Amafor, Ohaji/Egbema local government area of the state. Anybody who knew Adapalm and its contribution to the revenue of the old Imo state, and its derelict state now would weep for the state. Available figures showed that in the early seventies and eighties, Adalpm contributed over 20 percent of the revenue of the state.         

Ikedi Ohakim’s administration did so much through his Commissioner of Agriculture, Chief Longers Anyanwu to see to the revival of the Oil palm industry, with Adapalm as the focus . The policy document submitted by Chief Anyanwu helped to put Adapalm back on stream.  I was shocked recently to read an article written by Mr. Steve Osuji, the Special Adviser (Media) to Governor Emeka Ihedioha, that Adapalm has been run down, indeed, sold to a private individual, allegedly from the state. I wept, because, Imo may have lost the opportunity to make Adapalm what it was used to be, a money spinning outfit.

It’s in this connection that I commend  President Muhammadu Buhari and the Central Bank of Nigeria (CBN) for the fresh impetus for the oil palm industry in the country. The President had last month directed the CBN to blacklist any firm, its owner and top management caught smuggling or dumping any of the restricted forty-three items into the country. The CBN Governor disclosed the presidential directive during a meeting with oil palm producers in the country. Many of them are from the South East.

By the presidential order, the CBN now has full powers to expand and provide support to firms and individuals that want to expand the production of ten different commodities in the country. These commodities include rice, maize, cassava, tomatoes, cotton, oil palm, poultry, fish, livestock dairy and cocoa. According to the CBN, about N30bn has been disbursed to those currently involved in oil palm farming. Plans are also underway to extend credit facility to those who are coming into oil palm business.  The money will be disbursed through their designated banks. The CBN Governor said the idea is to ensure that the importation of palm oil is stopped forthwith and to enable the sector generate foreign exchange, reduce the level of unemployment in the country. It’s all part of the diversification effort of the Buhari administration.  The plan is also part of the CBN’s ongoing Anchor Borrowers Programme and its Commercial Agriculture Credit scheme believed to have been a huge success.

Considering the fact that Nigeria currently spends a whopping $500m yearly on palm oil import, which is a huge drain on the country’s external reserves, the CBN initiative should be seen as a rescue effort to boost oil palm production in the country. Only recently, the apex bank had initiated similar plan for the textile and cotton industries. With an estimated three hectares of land under cultivation and abundance of arable land, what is left is the cooperation of the stakeholders especially state governments in the oil palm producing zone. This has become necessary because such cooperation will not only make land available to investors with the financial and technical know-how, it has the potential to make Nigeria once again one  of leading palm oil exporters in the world. It is important that both large and smallholder farmers are factored into the value chain.

Today, Nigeria is a distant fifth among leading producers of palm oil. Statistics show that Nigeria   produces about 3 percent of the global supply of palm oil, with estimated production of 800,000 metric tonnes, while countries like Malaysia and Indonesia produce 25 million and 41 million tonnes of palm oil, respectively. Statistics show that currently, Nigeria is a net importer of palm oil. She imports between 400,000 and 600,000 metric tonnes annually to meet local demand for this commodity. In spite of the availability of over 3 million hectares of farmland for palm oil cultivation, production is still low.

It’s my belief that the renewed effort by the CBN will reposition Nigeria in the global oil palm industry market . 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. Despite the CBN placing oil palm in the foreign exchange exclusion list, official figures show that importation of palm oil has declined by about 40 percent from the peak of 506,000 metric tonnes in 2014 to 302,000 metric tonnes, according to figures from the CBN.

Also, as part of the intervention efforts, CBN says it is working hard to encourage viable off taker agreements between farmers and large-scale palm producer companies in the country. Under the arrangement, loans will be granted through the Anchor borrowers Programme (ABP), a solid credit initiative vehicle introduced by the CBN, three years ago. Under the ABP, the apex bank says it places emphasis on seven agricultural products – rice, cocoa, cashew, sesame seed, palm produce, maize and cotton. For now, palm produce is receiving boost in the agricultural diversification value chain. Until now, rice production received great attention via the ABP that kicked off in Kebbi state.  It is encouraging that the South South and South East governments have reportedly 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 development of large-scale palm oil plantations across the country. One must say that 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. But, for the farmers/investors, this vision for the palm oil industry can only be a reality if they have access to loans at single-digit as promised by the CBN.  Access to soft credit, improved infrastructure, especially access to roads, will help create jobs and evacuate palm produce easily from the farms and cut down wastes. Although the economy has recorded marginal investments in the palm oil value chain in recent years, these investments, the CBN recently admitted, have fallen short of expectation and projected target in oil palm production. Therefore, the federal government and the state governments of the South south and South East states should work as partners in this effort.

Overall, to achieve government’s dream of diversification and self-sufficiency in the products available locally and boost exports and foreign exchange earnings, government must identify and address the problems that hamper palm oil production. These, we reiterate including challenges of acquiring farmlands, long-term funding sources at affordable cost.

If Nigeria had kept pace with her peers in supporting improved cultivation of palm oil, at the present global market price of $600 per tonne and an estimated production level of 16 million tonnes, Nigeria would have generated almost $10 billion worth of foreign exchange. This is beside the amount of jobs that would have been created in the rural communities from large-scale, smallholder developments.  The intensification of efforts to return agriculture to its preeminent place and palm oil industry as a mainstay of the economy of the southern states of the country should be encouraged with the overall strategy to reduce reliance on crude oil revenue and diversify the productive base of our economy. The new administration in Imo state should not allow Adapalm collapse. It should partner with the CBN in reviving the oil palm. Let the impact of the CBN plans for the palm oil industry begins to bear fruits as quickly as possible.

Source: Sun News

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