THE NIGERIAN OIL PALM

The Oil Palm tree in most tribes in Nigeria signifies Life and Productivity. It is most times referred to as “The king of trees”. This is because it thrives in the tropics and has economic values which has sustained Nigerian families for many years.

A palm fruit bunch

It is generally accepted that the Oil Palm (Elaesis guineensis) originated in the tropical rain forest of West Africa. Mature palms could grow about 20m tall. The leaves are pinnate and could reach between 3-5m long. The palm fruit takes about 6months to mature.

ECONOMIC IMPORTANCE

There is nothing on an oil palm tree that is not useful. The fruit, fronds, trunk etc, they are all used for things that are beneficial to us.

Palm Oil is derived from the reddish covering (Pericarp) of the palm fruit. It’s a common cooking ingredient in Nigeria and is used in commercial food industries in other parts of the world. It is also used as an industrial lubricant and also form the basis of some soap products and candles etc.

Palm Oil

Palm fruit products sold in a store

Palm kernel oil is an edible plant oil derived from the kernel of the oil palm. This oil does not contain cholesterol or Trans fatty acids. It suitable for the production of soaps and other personal care products.

Oil palm fronds are the branches and leaves of the palm tree. They are used in making thatched roofs, fences etc. They are low in protein and have high fiber material that can be used to feed many classes of herbivore livestock such as cattle, goats etc., the fronds are used as brooms in most Nigerian homes. The palm frond also has its modern day aesthetic and some religious values.

Goats eating palm fronds

Nigerian girl sweeping with a broom made from palm fronds

A Nigerian woman sweeping her compound with  palm fronds

A decoration made from Palm fronds

 The trunk of the palm tree and the fruit fiber can be dried and used as fuel.

The empty fruit bunches are sometimes dried, burnt and used to produce potash for cooking.

PAST GLORY

 

Before the advent of crude oil production in Nigeria, Nigeria’s main stay was agriculture and was dominated by palm oil production. 

As palm oil found wider use in food- processing and industry, global demand for the commodity surged. By 1982, worldwide palm oil export had grown to about 2,400,000 T per annum. 

For most of this period, Nigeria held Centre stage as one of the largest producers and exporters of palm oil accounting for more than 40% of global output in the 1950s. At the time of the country’s independence from British colonial rule in 1960, palm oil contributed 82% to national export revenue.

 

However, the oil boom on the mid-seventies and subsequent decline of farming proved catastrophic to the sector. By the end of the twentieth century, the Nigerian palm oil harvest had dwindled to just 7% of global production. More embarrassingly, it is said that Malaysia, the world’s second largest producer and exporter of palm oil, bought their first palm fruits from Nigeria. The once largest exporter had turned into a net importer of palm oil, sourcing 180,000 MT of the commodity from international markets to meet local demands.

THE WAY FORWARD

Just like in Malaysia, the oil palm industry represents one of the most effective avenues for poverty alleviation, employment of millions of skilled and semi-skilled people, food security, and ensuring economic stability in Nigeria hence economic reforms initiated by recent Government administrations have succeeded in nudging the sector out of stagnation by reviving dormant oil palm establishments, supporting local and international investment etc. 

The Nigerian Institute for Oil Palm Research (NIFOR) , Benin, Edo state was established in 1939 and was formerly known as WAIFOR, West African Institute for Oil Palm Research. It is an international center of excellence in Palm and Shea Research and Development, bringing extension support for the Nigerian palms industry.

The ADA PALM plantation. This is one of the oldest Oil palm plantations in Nigeria. It is located in Ohaji LGA in Imo State. This project started in 1968 by the Federal Government of Nigeria but is now owned by the Imo State Government.

The Niger Delta is at the heart of Nigeria’s Oil palm belt with abundant wild grooves and numerous small holding oil palm farms as well as functional estate plantations.

An oil palm plantation

Wilmar international limited, a leading agri-business group in Asia has acquired oil plantations in excess of 30,000 hectares and also green field for oil palm cultivation under the name, Biase Plantation Limited in Cross River State.

Calabar Oil Palm Estate (Real Oil) now known as Real Oil Plantations Limited is an indigenous company that has invested in Oil Palm Plantation in the state. They have a large processing plant for oil palm and palm kernel oil.

Ibad Farms PLC also has an oil palm plantation in Cross River State of about 10,000 hectares.

Oil palm plantations can aslo be found in Nsukwa, Ubulu Ukwu and Ashama in Aniocha south LGA in Delta State; Okitipupa Oil Plc in Ondo State, Sudit Oil Ibadan and many other places within the country.

INVEST IN NIGERIA

The gap between the production and consumption (shortage in supply) of palm oil which are currently filled by imports provide the greatest opportunity for investors. Considering the amount of palm oil that is being imported into Nigeria, and the significant end market value which is about 60 billion Naira, the vision of every investor in this sector should be to replace 50% of palm oil imports with increased production of about 150,000 MT per annum for the next ten years.

The time is now. Nigeria is shifting its gaze from crude oil to agriculture. Investors can enjoy the friendly reforms that are available in this sector.