Akwa Ibom, Cross River, Rivers, Abia, Edo, Ondo, Imo, Delta, Bayelsa, and Anambra States are the ten largest producers of palm oil in Nigeria, with the potential to bring Nigeria to a place of self-sufficiency and contribute to food security. However, in 2019, a total of about $500 million was spent on imports even though Nigeria is the third largest country in planting the oil palm fruit. As a result of low yield, Nigeria ranks fifth in the world amongst palm oil producing countries. Looking at the statistics for the last couple of years, specifically between 2016 and 2020, there has been a significant reduction in the production of palm oil. Between 2016 and 2017, there was first an increase, per 1000 metric tons, from 990 to 1025. However, there was a drop in production from 1025 to 1015 between 2017 and 2018, which has been the steady number since then. Looking at the figures for consumption levels, there is a lot to be done in terms of production – between 2016 and 2019, there has been a steady increase in consumption from 1240 to 1340 metric tonnes according to a document available to MSMEsToday.
Aware of existing potentials for Nigeria to reach self-sufficiency and food security, the government made a decision in 2019 to invest N180 Billion to increase its oil palm production from 600,000 tons a year to 5 million tons a year by 2027. The eight-year plan is aimed at increasing the oil palm estate to 6 million hectares, which would provide 225,000 full time jobs and at least 450,000 seasonal jobs. This opportunity is to encourage private sector businesses to invest in the palm oil industry, and some of the incentives include tax exemptions, a 35% VAT placed on imports to give investors competitive advantage as well as low interest rate loans.
Experts say that for Nigeria to reach self-sufficiency in palm oil production, there needs to be at least 24 million hectares of land being used to grow and process the palm fruit. The aim to increase the oil palm estate to 6 million hectares of land by 2027 from a current 3 million hectares means that Nigeria may not even reach self-sufficiency by 2040 except there is increased investment on a multiplied level. This means there are great opportunities for MSMEs to invest in a part of agric value – chain of palm like planting, processing, packaging, distribution, marketing, etc. It also gives room for proper collaboration between businesses in any of the areas of the value chain to pool resources as well as obtain funds from financial institutes to contribute to the food security initiative of government in Nigeria.