We can trace palm oil production in Nigeria as far back as before the colonial era, although the development started in the 1920s (Peter Kilby, 1956), and as of the early 1960s, Nigeria was the largest producer of palm oil.

Like every other agricultural sector, after the discovery of crude oil, the production of palm oil in Nigeria experienced a drastic negative change and sadly has not recovered from it. From producing 43% of the total world consumption in the 1960s to producing just 3.5% of the total world palm oil consumption.

uses of palm oil

Palm oil is the most versatile and important vegetable oil for consumption and serves as raw material for both food and non-food industries. We mostly used palm oil in Nigeria as a simple frying oil, but many other industries apart from the food industries make use of both palm and palm kernel oil, including: 

  • Consumer retail food and snack manufacturers
  • Personal care and cosmetics 
  • Biofuel and energy 
  • Animal feed (palm kernel expeller)
  • Pharmaceutical 
  • Industrial 
  • Foodservice/processing industry 

Palm oil-based ingredients are in approximately 50% of our everyday products, including food and non-food items.

So if you get products like cookies, biscuit, bread, peanut butter, soap, Pizza Dough, Instant Noodles, Shampoo, Ice Cream, Detergent, Margarine, Chocolate, body creams /lotions, makeup product and so much be certain there is a trace of palm oil in them.

palm oil fruit
Palm oil fruit
Palm oil consumption in Nigeria

This explains why the demand for palm oil is ever increasing, with a population of over a 200million and an average consumption of 12.5kg/person/annum. No doubt the country consumes an enormous amount of palm oil products. Unfortunately, the total Nigeria palm oil production capacity remains at 4.93 million metric tonnes/year as against the yearly consumption rate of about 7 million metric tons.

This has created a deficit of about 3 million metric tons, resulting in Nigeria using over US$223.65 million to import palm oil products. According to PWC, this figure would even go as high as US$1.28 billion in the coming years, if we do not give quick attention to palm oil production in Nigeria. 

There are so many reasons that have led to the decline of palm oil production in Nigeria; the sector faces a lot of challenges. They are quite enormous, but some are key challenges in the palm oil industry. These include;

Challenges of palm oil production in Nigeria
  • Use of unimproved varieties/natural regeneration: Most of the oil palm plantations in Nigeria have existed for years and most grew naturally. The need to improve the cultivation and planting of improved palm oil seedlings has become a major priority to meet the ever-growing population.
  • High cost of land: These remain one of the key challenges in the palm oil industry, palm oil production requires a vast area of land. Because of competition between agricultural land and urban development, a lot of agricultural base land is being converted for other purposes.
  • Lack of modern technology and manual harvesting: crude and local farming methods and technology still largely dominates palm oil production in Nigeria. For instance, the use of a local rope called “ete” in Igbo language to get palm oil-seed from the tree is still predominant in the country. This has created a lot of negative effects and major setbacks in the oil palm industry, ranging from low output to low labor and even high disaster rates. 
  • Lack of processing facilities: this is undoubtedly one of the major challenges of palm oil production in Nigeria, unlike other advanced countries where they use sophisticated processing methods and technology. Nigeria still relies on the crude method of processing.
  • Lack of access to credit and loans: lack of access to capital, credit, and loan is a major source of concern, as regards the production of palm oil in Nigeria. The palm oil production process is an intensive farming process and requires enormous capital. Unfortunately, most rural farmers involved do not have access to credit or loans, this has reduced their chances of expanding to meet the growing demand.
Other challenges

Although these are the key challenges of palm oil production in Nigeria. But other contributing factors are very important to the development of palm oil production in Nigeria, such as;

  • lack of fertile soil,
  • lack of processing facilities,
  • incompatibility of modern technology
  • Infestation of pest and diseases
  • high cost of agrochemicals, fertilizer, and even lack market.

In Fact, some production plants have folded up over the years because of these and there is a high belief that this may also prevent young prospective farmers from venturing into the oil palm business. 

Prospect of palm oil production in Nigeria 

Oil palm plantation
Oil palm plantation

Despite all these enormous challenges facing the palm oil industry, if we placed much attention and investment in the industry. There are huge foreseen prospects of palm oil production in Nigeria. Such as.

  • source of revenue for the government and the citizens
  • Improve the standard of living of smallholder farmers 
  • increase oil palm output/yield
  • increase in farmers’ income and investment return
  • Employment generation 
  • Reclaiming of wastelands
  • Improvement of food security and also increase in quality of produce.

According to the Central Bank of Nigeria (CBN), if Nigeria had maintained its market dominance in the palm oil industry, the country would have been earning approximately $20 billion annually from the cultivation and processing of palm oil as of today. This no doubt shows the Nigeria palm oil industry has a huge prospect.

The way forward

The oil palm industry remains one of the most important agricultural sectors in Nigeria. Not only is it the most widely consumed vegetable oil in the country, but it also contributes hugely to the economy of the country, through its large export earnings. Presently, the industry is faced with lots of challenges, especially traditional production methods and inefficient technologies.

with improved varieties of planting materials and seedlings, provision of access to credit and loan facilities, modern harvesting, processing and storage facilities and so much more, the Nigeria oil palm industry should no doubt go back to its former glory. 

Farmcenta recently launched its oil palm value chain in response to bridge the gap between palm oil production and its increased demand