Combating Unemployment in Nigeria through Oil Palm Production

Sustained economic development is vital for any nation to attain long term poverty amelioration for social and environmental sustainability. The palm oil industry in Nigeria represents one of the most potent means for combating poverty, ensuring food security, improving productivity and generally attaining economic stability in Nigeria.

Palm Oil, botanically called Elaeis Guineensis is a perennial crop which is said to have originated in the tropical rain forest of West Africa. It later spread to South America in the 16th century and to Asia in the 19th century. Exportation of palm kernels began in 1832 and by 1911, West Africa alone exported 157,000 tonnes of which about 75%  came from Nigeria. However, in 1934, Malaysia surpassed Nigeria as the largest exporter of the product and has since maintained the lead.  As at 2016, Malaysia and Indonesia have become the dominant powers in palm oil production supplying more than 70 percent of the palm oil consumed worldwide.

Though Palm oil cultivation has been ascribed as a way of life for many Nigerians, the country has become a net importer of palm oil. Research conducted by Sahel Capital, a fund manager and advisory firm in West Africa indicates that, the production of palm oil in Nigeria is significantly below the country’s estimated consumption of at 1.4 million tons. About 40% of palm oil is imported while the other percentage is sourced from groves and smallholder plantations rather than industrial plantations. Currently, Cote d’Ivoire is the only net exporter of Palm Oil in West Africa.

Experts stress that the declined palm oil and kernel exports were as a result of increased domestic consumption following population grown and the lower producer prices allowed by marketing boards which had a monopoly of purchase for export. They add that the ceaseless tapping of local wine from the palm tree which reduced the productivity of the palms, hence producing fruit with thinner pericarp, or husks, lowering the quantity of the oil per hectare with poor quality was another factor.

In developed economies, palm oil is used in the manufacturing of many foodstuffs, the tree also has been identified in many industrial applications such a paper, pulp and particle board production, making of detergents, greases, lubricants and candles. Palm oil formed the basis of industrial scale soap production, such as Lever Brothers (Unilever Nig Plc) sunlight soap and the American Palmolive brand. Also, this staple crop has proven to be a valuable feedstock for biodiesel and serves as an alternative to mineral oils used in power stations. Apart from local trade in palm oil, it is heavily sold on the international markets as CPO (Crude Palm Oil) and usually commands a high premium price given its vast capabilities and high demand from several industries.

With these myriads of benefits, the  palm  oil  industry  has  the  potentials of  providing  employment  for  many Nigerians.  Palm oil is one of the commodities produced in rural Nigeria whose consumption daily in the human diet and use as an industrial raw material have increased its potentials for income generation and poverty alleviation. This was acknowledged by the World Rainforest Movement that affirmed that “oil palm is indigenous to the Nigerian coastal plain though it has migrated inland as a staple crop. Cultivation of oil palm serves as a means of livelihood for many rural families and indeed the farming culture of millions of people in the country’’.

Therefore, to unlock the potentials in palm oil business, it is imperative for government and individuals to put in a more deliberate effort to cultivate modern oil palm plantations that contain selected (hybrid) oil palms with very high yields.

While the land tenure system in Nigeria may be a limiting factor against private mass production of palm oil, the local and state government should rise to the challenge by providing land areas and needed technologies to palm oil farmers.