APR 19 EDITIONBusinessEconomy

The Return Of Palm Oil

By: Stanley Nwachukwu

The Central Bank of Nigeria(CBN) has begun partnership initiatives with 11 palm oil producing states in Nigeria with a view to reviving the sector. This move by the Apex bank is in line with the federal government’s resolve to return Nigeria as one of the leading global producers of palm oil as well as diversify the economy away from crude oil. CBN governor, Godwin Emefiele, disclosed this in Abuja at a meeting with the 11 South South and South East governors of oil palm producing states and other top government officials.

Mr. Godwin Emefiele, Nigeria’s Central Bank Governor

The meeting was called to elicit their participation and set a partnership model that would stimulate investments in the palm oil plantations such that within the next three to five years, the global share of the country’s oil palm production would more than double. An ambitious plan, which is expected to lift Nigeria up the ladder to the world’s third-largest palm oil producer. The plan is to overtake Thailand and Columbia in a few short years. The CBN boss noted: “If we had kept pace with our peers in supporting improved cultivation of palm oil, at the current global market price of $600 per tonne, and an assumed production level of 16m tonnes, Nigeria could have generated close to $10bn worth of foreign exchange for the country. This analysis does not take into consideration the amount of jobs that could have been created in our rural communities from large scale smallholder developments.”

An area view of an Oil Palm Plantation

To achieve this, the CBN governor is advocating for improved financing. He said: “With regards to improving access to finance for smallholder farmers focused on cultivation of palm oil, the Bankers Committee has established a special sub-committee to make recommendations on sustainable financing models for oil palm and four other critical agricultural commodities that include cocoa, sesame seed, shea- butter, animal husbandry and cashew. CBN governor, Godwin Emefiele announced that loans would be granted through its Anchor Borrowers’ Programme and Commercial Agriculture Credit Scheme (CACS) at no more than 9% per annum to identified core borrowers in the sector for funding of their oil-related projects.

Nigeria’s Central Bank Building, Abuja

He said The CBN will work with large corporate stakeholders and smallholder farmers to ensure availability of quality seeds for this years planting season and agro­ chemicals in order to enable improved cultivation of palm oil. “We will also work to encourage viable off taker agreements between farmers and large-scale palm producing companies. “With an estimated three million hectares of land under cultivation, abundance of suitable arable land, we need the cooperation of our state Governments in the oil palm producing zones to make land available to investors with proven financial and technical capabilities, who will be able to support developments of large scale palm oil plantations in the country.”

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