Thursday, 18 May 2017

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Palm Oil And The Industrial Take-off Of The South East

After months of concerted efforts, Nigeria appears to have reversed dependence on imported rice. The same alacrity should be directed at production of palm oil, a produce for which the country and, indeed, the South East, was once famous for as number one grower.

To demonstrate how far the country has fallen in this regard, the story is often told of how one of the world’s leading oil palm growing country, Malaysia, got their first seedlings from Nigeria in the 1960s, when Nigeria was the world’s numero uno in oil palm production.
South Eastern states where the crop flourished pre-civil war were recently thrown a challenge by the Bank Of Industry (BOI) to the effect that they should revitalise moribund plantations and processing plants to diversify and grow the economy of the zone.

Indeed, the region can do with such diversification given that commerce is the mainstay of the economies of these states; even if they have a cluster of local products producing industries including shoes and textile. A solid industrial base rooted in harvesting, processing and refining of palm oil would be a prized addition to the already tasty economy gravy of the region.
The call by Kabiru Mohammed, BOI managing director is against the backdrop of the economic history of the region. While the North thrived on the groundnut pyramids and the West on Cocoa, the east flowed with palm oil. Oral history has it that trade in the product was well established even in pre-colonial times and flourished thereafter.
There are recorded histories of ancient Egypt sourcing palm oil and nuts from these parts. Three years after the birth of the Republic and with a population of 55 million, the country produced about 650 thousand metric tonnes of palm oil. This compares with the 850 thousand metric tonnes produced today with a population of 180 million.
But with the discovery of crude oil and the resulting rural urban drift, production took a hit as did most of the country’s former agric mainstays.
The stories coming out of Malaysia should be enough ginger for the government and people of eastern Nigeria. One report says that on account of the oil palm, unemployment in that country is negative. Negative unemployment means that they have employed all interested citizens and they are wooing people from other countries to come and work in the oil palm and associated industries.
How did they do it? An account by Gbenro Adeoye, an oil palm researcher and investor who visited Malaysia, says that the government pumped in millions of dollars into oil palm research, leading to the establishment of 28 research institutions. These institutions in turn, came up with 42 different products both for internal consumption and export.
Suffice this to mean that the chronic unemployment problem in Nigeria can be partly solved by the oil palm industry. The industry offers opportunities “in harvesting, processing and refining”. In other words, the industry provides leeway’s for people who want to work on the farms as it does those who want to work in companies that produce physical things like cosmetics and also to those who are interested in refined products in the form of oils.
Unfortunately, the industries in Nigeria ‘have not grown at the rate the research development has grown, according to  Dr. (Mrs.) Christy Okwuagwu, the most senior crop scientist at the Nigerian Institute for Oil Palm Research (NIFOR).
Despite the lull from the eastern parts, the natural source of the oil palm seeds, now is an auspicious time to start a new chapter geared towards world domination. BOI has pledged support. “As the leading Agricultural Development Finance Institution in Nigeria, the bank is ready to offer its expertise, experience, and technical capabilities to support the region in its quest for diversification,” says Mohammed.
What is even startling is Mohammed’s revelation that the region is not reaching out for their ‘entitlements’ warehoused in the BOI. He said that the amount so far disbursed in the zone fell below the expected target for the region, considering the abundant opportunities in the area.
The shortest and most practical way of getting back to the palm oil map is to resuscitate abandoned plantations scattered all over the South East, according to BOI. After this is achieved, only improved seedlings should be planted as they guaranty 23 percent yield but with the application of mechanised methods, over 90 percent yield can be got, Abioye maintains.
The natural endowments of the region and availability of cheap labour guarantees success of such a move but it behoves government to strengthen the local policy environment to help the industry thrive, first to meet local needs and then for export.
Currently, the exchange rate situation discourages import of the product; it forces industries to look inwards which is a good thing but it is also a bad thing because scarcity of inputs forces prices to skyrocket especially as the product is seasonal in Nigeria. The challenge of seasonality can be surmounted where there is excess production and good storage system.
The question still remains if the South east will take advantage of this auspicious opportunity.

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