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Nigeria’s annual spending on palm oil importation hits $500m

Buhari orders CBN to blacklist companies importing palm oil, 42 other items

Nigeria spends approximately $500 million annually importing palm oil as local production capacity remained well below users’ demand, industry watchers and staff of the ministry of agriculture said on Thursday.

At a national symposium on oil palm organised by Solidaridad, an international non-governmental organization held in Abuja, governmental officials and stakeholders agreed to reverse the trend by stepping up palm oil processing to boost self-sufficiency.

A director in the ministry, Bernard Okata, who attended the workshop said: “Our current local requirement for oil generally is about three million metric tonnes but we are producing about 1.02 million metric tonnes of oil palm.

“So there is a gap. We import to make up for this gap and Nigeria is spending about $500 million annually for this importation up till now.”

Nigeria, world’s fifth biggest producer of palm oil, one percent share of global production is well below Indonesia and Malaysia, who account for 58 percent and 26 percent share of global production respectively.

The country’s supply gap currently lies at 66 percent, creating opportunities for exporters and foreign markets and pressuring manufacturers to source internationally to bridge the shortfall at higher costs.

Read also: Buhari orders CBN to blacklist companies importing palm oil, 42 other items

Okata said Nigeria’s oil and fat needs were around three million metric tonnes.

“We have oils from groundout, soybean and all that. But from oil palm alone, we are producing 1.02 million MT, while from other oils we produce 1.7 million MT and so the shortfall is about 350,000MT.

“So the significance of this partnership is to ensure that the foreign exchange is channelled to the development of other activities if we can expand our oil palm production to satisfy our local industries,” the director said.

The senior climate specialist for Africa at Solidaridad, Sam Ogala, said Nigeria was spending around half a billion dollars on palm oil imports because it did not prioritise local demand.

“This country is spending around $500m annually to import oil palm. That shows you the huge gap and it’s because we are not meeting local demand.”

“In the early 1960s before the oil boom, Nigeria was exporting oil palm, but after that oil boom, we started importing and all forms of oil palm are finding their way to the Nigerian market,” he stated.

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