Emmanuel OchayiPalm oil production is a significant industry in Nigeria. The country is one of the world’s largest producers of palm oil. The lack of employment opportunities has made people seek other reasonable ways to earn a living in Nigeria.
The palm oil business is a great way to earn money as a Nigerian. This is because palm oil is in high demand since many people need it to cook. In 2021, it was assessed that Nigeria produced 1,280 thousand metric tonnes of palm oil. This exhibits the vastness of the production of palm oil in this nation. Nigeria is among the top five palm oil-producing nations in the world
Join our WhatsApp ChannelThe business involves cultivating oil palm trees, harvesting the fruit, processing it into palm oil, and then selling the oil domestically or internationally.
Key points about the palm oil business in Nigeria:
Abundance of Oil Palm Tree
Nigeria has favorable climatic conditions for oil palm cultivation, making it one of the top oil palm producers globally. Naturally, palm trees do survive in the rainforest ecologies. Therefore, they are planted in the south-western and eastern Nigeria, as well as in the Niger Delta regions.
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Specifically, palm oil is abundant in Enugu, Imo, Ondo, Edo, Ekiti, Cross River, Delta, Akwa-Ibom, Bayelsa, Anambra, Oyo, Abia, and Ogun states, and these are considered to be the largest producers of palm oil. Palm tree plantations are spread over an area estimated to range from 1.65 million to 2.4 million hectares.
The estimate of palm tree plantations in Nigeria ranges from 169,000 hectares (72,000 hectares of plantation property and 97,000 hectares of small plantations) to 360,000 hectares of plantations.
The palm fruits are processed in small factories located in rural areas by farmers, packaged in barrels, and then transported to the market for sale.
Smallholders and Large Plantations
Palm oil production in Nigeria includes smallholder farmers and large-scale plantations. Many small-scale farmers are involved in this business, contributing to the country’s overall production.
The Nigerian palm oil industry is fragmented and dominated by numerous small-scale farmholders, which account for over 80 percent of local production, while established plantations account for less than 20 percent of the total market.
Processing Mills
There are numerous palm oil processing mills throughout Nigeria where harvested palm fruits are processed into palm oil. These mills vary in scale from small, traditional methods to large, modern facilities.
Export and Local Consumption
Nigeria exports palm oil to various countries, but a significant portion is also used for domestic consumption in cooking and various industrial applications.
Challenges
The industry faces challenges like low productivity due to outdated farming methods, land tenure issues, and environmental concerns related to deforestation for palm oil plantations.
Because oil palms grow only in a tropical climate, large areas of rainforest are often felled to make way for palms – with greenhouse gases being released as a result of slash-and-burn. The problem is particularly acute in Indonesia and Malaysia, which produce around 85 percent of the world’s palm oil. In Indonesia, some 1.7 million hectares of rainforest were felled in 2015 alone.
It is estimated that around 50 percent of deforestation in Indonesia in the first decade of the millennium was attributable to palm oil. As a result, Indonesia is losing its rainforest faster than any other country in the world.
Because of the shortage of fallow but potentially usable land in Southeast Asia, investors and palm oil companies are increasingly turning to West Africa – where the oil palm originated – and Latin America as places in which to expand production.
Slash-and-burn for palm oil. Destruction of the rainforest increases the amount of carbon dioxide in the atmosphere. To make way for palm oil plantations, the forest is often cleared by slash-and-burn. This releases large quantities of carbon dioxide, especially from peatlands.
Others are Human rights violations on plantations and the non-sustainability of the industry.
Economic Impact
The palm oil business plays a crucial role in Nigeria’s economy by providing employment opportunities and contributing to the nation’s GDP.
The Nigerian experience of palm oil development provides a clear example of how palm oil, as a result of its high yield and low production costs, is a highly effective means of alleviating poverty.
The World Bank has a long historical involvement with poverty reduction efforts in Africa and the developing world. The World Bank’s proclaimed mission is “to overcome poverty, enhance growth with care for the environment, and create individual opportunity and hope.
If you’re considering entering the palm oil business in Nigeria, it’s essential to conduct thorough research, consider sustainability practices, and adhere to government regulations to ensure a successful and responsible venture.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
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