Nigeria is planning to increase its palm oil production by 700% over the next eight years to improve its foreign exchange earnings, Bloomberg reported on 14 June.
The new policy would boost local production to about 5M tonnes/year from the current 600,000 tonnes/year by investing as much as 180 billion naira (US$500M), starting this year, the Trade and Investment Ministry said.
“Our policy objectives over an eight-year period (between 2019 and 2027) will see that we locally produce 100% of local crude palm oil demand by 2027, increase revenue from imports via duties and deliver 225,000 full time jobs and at least 450,000 seasonal jobs.”
Bloomberg said the new policy would remove the 75% duty rebate on refined palm oil imports and extend a current three-year tax holiday to five years for all producing and processing companies.
It would also introduce a five-year restriction on crude and refined palm oil imports to large-scale refineries and crushing plant owners.
Farmers would be given access to loans at 9%/year to expand cultivation by at least 3M ha.
Presco Plc, the country’s largest producer of palm oil, was driving an expansion plan that would see a 500 tonne refinery begin operating in the first quarter of 2020, with an additional increase of its milling capacity from 60 tonnes/hour to 90 tonnes/hour by next January, Bloomberg wrote.
Felix Nwabuko, the CEO of Prescott Plc, the country’s largest palm oil producer, told investors that the company was expanding, and expected a 500 tonne/hour refinery to begin operating in the first quarter of 2020, and its milling capacity to increase from 60 tonnes/hour to 90 tonnes/year by next January.
Nigeria’s palm oil imports rose from 302,000 tonnes in 2017 to 600,000 tonnes at the end of 2018, costing the country as much as US$500M, Bloomberg wrote.
The country was the world’s fifth largest producer of palm oil, although it only accounted for less than 2% of global production, behind producing giants Indonesia and Malaysia.