The Central Bank of Nigeria, CBN, has vowed to catapult the country to be the world’s third largest producer of palm oil, overtaking Thailand and Columbia.
Addressing stakeholders in the palm oil industry in Abuja Monday, the Governor of the CBN, Godwin Emefiele, stated that such could be done through improved and sustained financing into the sector.
According to him, if the country had sustained its momentum in the cultivation of the produce, “we could have generated close to $10bn worth of foreign exchange for the country.”
“If we had kept pace with our peers in supporting improved cultivation of palm oil, at the current global market price of $600 per tonne, and an assumed production level of 16m tonnes, Nigeria could have generated close to $10bn worth of foreign exchange for the country.
“This analysis does not take into consideration the number of jobs that could have been created in our rural communities from large scale smallholder developments.”
“With regards to improving access to finance for smallholder farmers focused on cultivation of palm oil, the Bankers Committee had established a special sub-committee to make recommendations on sustainable financing models for oil palm and four other critical agricultural commodities that include cocoa, sesame seed, shear-butter, animal husbandry and cashew,” Mr Emefiele added.
The CBN governor added that as part of the Anchor Borrowers Program, ABP, and our Commercial Agriculture Credit Scheme, CACS, “the CBN will work with large corporate stakeholders and smallholder farmers to ensure availability of quality seeds for this year’s planting season and agro-chemicals in order to enable improved cultivation of palm oil. We will also work to encourage viable off-taker agreements between farmers and large-scale palm producing companies.”
Thereafter he disclosed that “loans will be granted through our ABP and CACS programs at no more than 9% p.a to identified core borrowers.”
Mr Emefiele noted that “with an estimated 3 million hectares of land under cultivation, abundance of suitable arable land, we need the cooperation of our state Governments in the oil palm producing zones to make land available to investors with proven financial and technical capabilities, who will be able to support developments of large scale palm oil plantations in the country.”
He then announced that all the states in the South-South and South-East regions have agreed to provide at least 100,000 hectares with each for the initiative. This program is also expected to accommodate smallholder farmers.