“…. Today, Nigeria is on its way to self-sufficiency in rice production. We have to do the same with the palm oil industry. It is shameful that we are importing crude palm oil. We should be exporting.” Akinwumi Adesina
he Coalition of Oil Palm Value Chain Associations, including the National Palm Produce Association of Nigeria (NPPAN), the Oil Palm Growers Association of Nigeria (OPGAN), POFON) and the Vegetable & Edible Oil Producers Association of Nigeria (VEOPAN) expressed support for the backward integration policy where palm oil users were mandated to invest in oil palm plantation to phase out importation gradually.
x-Executive Secretary of POFON and Managing Consultant, Foremost Development Services, Mr Fatai Afolabi, in an interview with The Guardian, said to draw up long-term plans for the sector’s growth, there should be a coordinating body of all the stakeholders with the objectives of value chain growth, closing production deficit, capturing data and stimulating the economy with the palm oil sub-sector.
“So, if something like this is brought forward and it is transparent, I think it can help a lot in driving the industry.”There was a ban on the importation of palm oil at a time, Adebutu explained, and “My understanding is that when we came to the realisation that we were not producing enough palm oil locally to meet the industrial demand, the government at that time decided to lift the prohibition but put a 25 per cent levy on imported palm oil.”
Large, medium and small-scale crude palm oil (CPO) producers and processors in Nigeria have identified high cost of credit facilities, too many frivolous levies from government agencies, low investments, planting of low-yielding varieties by smallholder farmers, poor power supply and aversion for agriculture as some of the challenges retarding the sector.
These challenges have left the country with a huge production deficit of about 500,000 metric tonnes, while its contemporaries in the pre-colonial era (Malaysia and Indonesia) have maximised production and developed the value chain, making them the largest suppliers of crude palm oil.
Palm oil production business in Nigeria Palm oil production in Nigeria is the business that will give you more than 100% ROI – return on investment. Many other industries in Nigeria demand palm oil. These are industries like: Food production; Drug industry; Health industry; Beauty industry; Pet food industry; Cooking; Cosmetology. Palm oil is a basis for many products in the contemporary world. Moreover, it can be exported abroad to many countries where the palm tree is not so widespread. You can find palm tree almost everywhere in Africa and Nigeria. But to start your own palm oil business, you should first pay attention to the only domain of industry, and later you can try to spread your production on two and more sectors.
Palm oil processing steps To start your own production of palm oil in Nigeria, you need money. In any business, you need to make an input to get revenue. Fortunately, there are some institutions where you can get a loan and then pay it back in instalments: banks, cooperative societies, governmental agricultural agencies, personal loan lenders, and micro financial banks. You have to buy land to make your own plantation. Of course, the land should be situated in an accessible area for potential customers. Keep in mind that you will also need to have a source of water for your plants, so chose the right place. You should buy seeds. The seeding may cost about 150N, and you will need about 1000-1500 pieces of them for good revenue. Of course, the size of your land may vary, but in average 1000-1500 seeds will be enough. Mind that you will have to wait about two or three years to get your harvest. You will need to buy the necessary equipment, including palm oil processing machine. You will need to process the palm fruits into palm oil with little human effort to make the production process cheaper. However, you will still be obliged to hire workers for your plantation. You can simply rent a mill and produce palm oil there. You will have to find the place and containers to store a ready-made palm oil. Many people store palm oil in 25-litre kegs. The room for storage should be cool and dry. Try to find customers abroad, where the palm oil is demand. Nigeria has no acute need in palm oil because there are many producers. Start looking for your own distributor channels while you plantation is growing because the process of searching for customers may take some time. Find some potential customers, and when the time comes, promote your products.
Tax Issues
There is no gainsaying the fact that the current tariff regime of 35% (10% duty and 25% levy) on importation of palm oil and the inclusion of palm oil in the list of commodities that do not qualify for CBN FOREX allocation have been protective of the industry and at the same time the stimulant and tonic for growth.
To boost local production, Olajutoye, advised the government on the provision of farm settlements for the production of oil palm estates, adequate finance with low-interest rate should be introduced, improved seedlings and other agriculture inputs should be subsidised for farmers
Despite this protective policy, the local production capacity demand level has grown to about 2.1 million Metric Tonnes annually, and similarly, production has moved from 950, 000 Tonnes to about 1.3 million Tonnes. There is still a deficit supply of 800,000 Tonnes annually.
