Stakeholders Target Activating Nigeria’s $10bn Palm Oil Export Potential

Stakeholders are mobilising efforts to unlock Nigeria’s $10 billion palm oil export potential, aiming to enhance agricultural productivity and competitiveness.

Despite being a major producer historically, Nigeria currently exports only $1.34 million in palm oil, ranking 78th globally, while importing $372 million annually

A research and advisory firm, Vestance, launched a new report that revealed significant untapped opportunities within Nigeria’s oil palm sector.

The report, titled “Reclaiming Lost Glory: Nigeria’s Palm Oil Renaissance,” was unveiled October 30 in Lagos.

Vestance’s Research Lead, Razaq Fatai, said the report illustrates the immense opportunities lying dormant in the country’s underutilised oil palm plantations, noting that by capitalising and rejuvenating these plantations, Nigeria could generate over $10 billion in export revenue alone.”

He noted that Nigeria’s palm oil production began to decline during the country’s civil war between 1967 and 1970, saying, “It is now time to begin to reverse the decline and put the sector back on track.”

The launch event featured a panel session where experts spoke on the findings of the report and provided insights on ways to revitalise the oil palm sector.

The session, moderated by Vestance’s Chinwe Abuwa, brought together three distinguished industry figures who shared their perspectives on the future of Nigerian palm oil.

Managing director, SWAgCo (O’dua Investment Group),  Dr. Adewale Onadeko, stressed the necessity for Nigeria to embrace an agro-industrial cluster strategy.

He explained, “A cluster approach integrates essential infrastructure such as seeds, fertilisers, extension services, processing, and storage facilities.”

“This method allows for smallholder farmers to be incorporated into a cohesive unit, operating within a 25 km radius. Companies like Presco and Okomu have successfully implemented this strategy. By bringing farmers together and providing them with the necessary tools and knowledge, we can significantly boost productivity and efficiency,” Onadeko added.

Another panellist, Dr. Bayo Ogunniyi, Country Programme Analyst for International Fund for Agricultural Development, highlighted the myriad challenges confronting smallholder farmers, particularly the lack of access to finance and the prevalence of old, low-yield seeds.

He underscored the urgent need for Nigeria to distribute high-quality seeds to smallholder farmers to enhance production levels. Dr. Ogunniyi also pointed out that the oil extraction rates of smallholder palm oil processors are alarmingly low, often falling below 15 per cent, compared to the 25 per cent extraction rates achieved by modern processing mills. Improving these extraction rates is crucial for maximising the output from Nigeria’s palm oil sector.

In his own contribution, CEO of BulkDirect, Ramses Najem, emphasised the importance of situating processing facilities closer to the farms to reduce transportation challenges. He further said, “We must support small-scale farmers by providing them with the necessary financial resources, processing facilities, and extension services. This support is important if we want to transform Nigeria’s dependence on imported palm oil into self-sufficiency and export capability.”

Speakers at the launch called for a nationwide adoption of high-yield seeds to boost production, investment in modern processing facilities to increase oil extraction rates, and the development of strategic transportation networks to streamline the supply chain.

Programme manager of Vestance, Rildwan Bello, said, “We at Vestance are committed to helping unlock the immense potential in African agriculture. Through comprehensive studies like the Palm Oil Report, we provide valuable insights and strategic guidance aimed at transforming the agricultural and food sectors.”

Bello called on stakeholders in the palm oil sector, including government agencies, private sector investors, smallholder farmers, research institutions, and development partners to work together to help bring the palm oil sector back to its glory days.