The House of Representatives on Wednesday, 19th July, 2023 resolved to mandate the Federal Ministry of Agriculture to develop a policy to drive the development of palm oil production in Nigeria.

The House further urged the Federal Government to establish palm oil Intervention Fund as well as directed the committee on Agriculture Production and Services (when constituted) to ensure compliance.

The House arrived at this resolution sequel to a motion moved by Representative Bamidele Salam, the member representing Ede north, Ede south, Egbedore and Ejigbo federal constituency of Osun state.

In his comment, the Deputy Speaker, Rt. Hon. Benjamin Kalu said the initiative should be jointly developed using public-private partnership.

It was seconded by Hon. Modibbo Musa Ibrahim from Niger state.

While moving the motion, Rep. Salam emphasised that prior to the discovery of crude oil in commercial quantities in Nigeria, palm oil was a major agricultural export crop and a top foreign exchange earnings for the country in the 1950s and 1960s.

He also stressed that palm oil industry alone provides over 4 million jobs for Indonesia citizens hence it is a major factor that reduced Malaysia poverty from 50% in the 60s, down to less than 5% today and has contributed US$21.09 billion to Malaysia’s exports.

He assured that if Federal Government invests in palm oil industry, Nigeria has a huge potential in soaring up its foreign exchange earnings, increase output, create more jobs and ultimately reduce poverty.

According to the United States Department of Agriculture (USDA), Nigeria was the largest producer of palm oil in the world but has fallen to the fifth position with 1.5 per cent or 1.03 million metric tonnes of the world’s total output and an average production of 1.4 million metric tonnes.

Similarly, according to the President of the National Palm Oil Produce Association of Nigeria (NPPAN), Alphonsus Inyang, Nigeria is the largest consumer of the produce in the continent, consuming approximately 2.5 million metric tonnes yearly, while domestic production stands at less than 1.3 million metric tonnes, leaving a deficit of over 1.2 million metric tonnes.

The lawmaker expressed worry that Nigeria, which was a leading exporter of the palm oil, is now a net importer, depending largely on other countries to meet the huge supply gap over the years.

Part of the motion reads:

“Further worried that in 2022 alone, Nigeria imported 227,035 metric tonnes of palm oil from Malaysia. Between January-April 2023, the importation increased to 92,961 metric tons, from 20,513 metric tons in the corresponding period of 2022 which indicated a 72,448 metric tonnes increase.

“Also worried that the players in the industry have forecast that Nigeria’s oil palm imports from Malaysia will continue to increase for the time being, because our investment in the industry is still very insignificant.

Observed that the high cost of some essential commodities in Nigeria is directly related to the high cost of palm oil as there cannot be a Unilever without palm oil, same with noodles, as palm oil forms more than 45 per cent of raw materials that is needed for over 10 brands of noodles in the country today.

“Concerned that other essential food and household items such as vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked foods, washing detergents, Chocolate,  and even cosmetics are all made from palm oil.

Alarm that over the last five years, around 25% of the yearly domestic palm oil consumed in Nigeria was imported, despite having a comparative advantage in the production of the product.

 

Most of the companies in Nigeria are being supplied by Malaysia, Columbia and Indonesia, thereby putting pressure on the foreign exchange and creating jobs for foreign countries and Cognisance that palm oil is one of the fastest selling and most desirable agricultural commodities in the international market. A bottle of 75cl of palm oil is now between #1,000 and #1,200 as against #400 and #500 in 2018. A 5litres now between #5,800 and #6,600 as against previous price of #2,500 and #3,000”.

The parliamentarian alarmed that, while the price of palm oil keeps falling globally due to rising output in major palm oil producing countries, Nigeria output remains stagnant amidst rising demand.

 

BS-E4 Media