Over N30 billion Disbursed by CBN to Boost Palm Oil Production – Emefiele

Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele has bemoaned the current situation in the country’s oil palm industry and expressed the determination of the bank to change the narrative. Underscoring the importance of oil palm as a tree crop with immense economic value, Emefiele noted that its products are important sources of affordable edible and non-edible oils for domestic and industrial uses. He regretted that in spite of this, the Nigerian palm oil industry was at a crossroads, as its further growth and contribution to the national economy continue to be threatened by inadequate local production and continued reliance on imports.

Giving some backgrounds on the recent developments in the oil palm sector in Nigeria, the CBN governor recalled that the journey to revive the oil palm sector began with the discovery that over $500 million of our scarce foreign exchange was being expended on the importation of palm oil to meet identified unmet demand gap of 1.25 million metric tons. He, therefore, called on state governors to help the country through access to land for oil-palm cultivation, in order to reverse the situation. He said under its Oil Palm Development and Expansion Initiative, the CBN had so far disbursed over N30 billion to the oil palm sector which was being painstakingly monitored to ensure efficient and effective utilization and maximum output while oil majors and apex associations were being encouraged to adopt the Out-Grower Scheme to maximize inherent opportunities.

Emefiele spoke in Benin City, Edo State capital Tuesday at the Plantation Owners Forum of Nigeria Oil Palm Discourse – Focus on CBN Smallholder Oil Palm Intervention which also witnessed the launch of Edo State Oil Palm Programme (ESOPP), a N69 billion intervention programme designed to rejuvenate the oil palm sector in the state for global competitiveness.  According to Emefiele, “faced with this stark reality, the CBN decided to intervene with a view to changing the narrative and in line with the ambitious attempt to reposition agriculture as the mainstay of the Nigerian economy. Furthermore, in our bid to restore the country’s pre-eminent status as the third global net exporter of palm oil, the Central Bank of Nigeria on 23rd June 2015 included palm oil and palm oil products alongside other commodities in the exclusion list of items not valid for foreign exchange at the Nigerian Foreign Exchange window”. While attributing the dwindling fortune of the industry to myriads of factors that accumulated over the years, most significantly the neglect of the agricultural sector in the wake of the oil boom, Emefiele said this was further exacerbated by the inherent structural deficiencies and potential risks associated with agribusiness in Nigeria. “It is hard to believe that the country’s global market share in palm oil production fell from about 43% in the 1960’s to just about 2% currently”, the CBN Governor lamented.

Godwin Emefiele Photo
Godwin Emefiele

Explaining that the primary objective of the gathering was to exchange ideas and garner support to revive the oil palm industry and its entire value chain through financing major, micro, small and medium entrepreneurs and smallholders in the country, Emefiele said “I am indeed excited that we have arrived at this juncture in pursuance of the avowed objective of the administration of President Muhammadu Buhari, GCFR, to enhance economic diversification through agriculture. We will pave the way for greater and more endearing developments in respect of the development of the Nigerian oil-palm sector. This event today is germane in view of the realities and challenges of today’s economic environment, considering the need to diversify our monolithic economy from crude oil to productive sectors such as agriculture, which contributes over 20% to GDP and 36% to employment.” He believed that the strategic potentials of the agricultural sector and its value chain in an economy, if well harnessed, have the potentials for rural employment generation, ensuring food security and foreign exchange conservation through reduced imports into the country.

On the positive side, the CBN noted the efforts of state governments in the palm oil-producing zones which pledged to make available 100,000 hectares of land in their renewed commitment to revive the production of this important commodity, stressing that of special note was the active participation of corporate entities, both local and multinationals, that were matched to confirmed available lands from state governments and who, as part of their backward integration initiatives, are increasingly investing in palm oil and its value chain, especially at production levels.

 However, he said to sustain rural employment and ensure community participation and inclusiveness, “the bank is determined to promote and support individual smallholder farmers in the palm oil revival plan. It was in the light of the above that the Central Bank of Nigeria is out to collaborate with the relevant stakeholders to find sustainable solution to the financing needs of these smallholders farmers, among others”. Emefiele said the Central Bank of Nigeria, as a major stakeholder in the financial sector and indeed the economic development of the country, was set to render its unflinching support to the development of oil-palm by providing affordable long-term financing to out-growers and expressed his expectation that other stakeholders would borrow a leaf from this commitment and play their respective roles to enable the bank achieve its common goal and objective.

In his address, Obaseki said the state government was already leveraging on development of oil palm production as God-given natural wealth to develop the state, nothing that it presents thousands of opportunities apart from job creation, Industrial growth, and others. He said oil palm is synonymous with APC logo which is derived from the palm, adding that the whole gamut about Plantation Owners Forum of Nigeria Oil Palm Discourse -Focus on CBN Smallholder Oil Palm Intervention was to develop the economy of the state like that of Malaysia. Obaseki stated that the principal goal of the forum is to leverage what the CBN has initiated by removing all the risks involved in the cultivation and production of palm oil.

Highlights of the programme was formal presentation of the Edo State Oil Palm Programme: Policy Value Chain and Funding by the Special Adviser to Governor Obaseki on Agriculture, Joe Okojie who during his presentation, said the state had mapped out 120,000 hectares of land for oil palm cultivation in four local government areas of the state namely Ovia Northeast, 25,329 hectares; Ovia Southwest, 36,759 hectares; Orhionmwon, 51,000 hectares; and Uhunmwonde, 6,912 hectares.

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