Bashorun Calls for Climate-Smart Investment in Nigeria’s Palm-Oil Value Chain
Nigeria has the capacity to produce, process and refine enough palm oil to meet a substantial share of its domestic demand while building a stronger export market, according to Dr. Abiola Bashorun, Coordinator, Climate-Smart Agronomy Programme.
Nigeria’s continued importation of palm oil from other West African countries should therefore not simply be viewed as an embarrassment for a country that remains one of Africa’s major palm-oil producers.
Rather, it should be regarded as a clear economic signal that the country’s domestic palm-oil value chain is not yet producing, processing and refining enough to meet the needs of its large and growing population.
For Bashorun, the supply gap presents an opportunity for Nigeria to deliberately expand domestic palm agriculture, modernise processing and increase refining capacity so that more of the nation’s demand can be supplied by Nigerian farmers and industries, while creating the foundation for a competitive export market.
Nigeria’s population exceeds 200 million, while its expanding food-processing and manufacturing sectors continue to generate substantial demand for palm oil.
Beyond household cooking, palm oil is a critical input in the production of edible oils, margarine, baked foods, soaps, detergents, cosmetics and numerous other industrial products.
Demand is therefore substantial and expected to continue growing.
The challenge is that domestic production has not expanded sufficiently to keep pace with this demand.
A significant part of Nigeria’s palm-oil industry continues to depend on smallholder farmers, many of whom face low yields, ageing trees, limited access to improved seedlings, inadequate financing, labour-intensive harvesting and inefficient processing.
Nigeria consequently finds itself in an unusual position: a major palm-oil producer that still needs imports to bridge its domestic supply deficit.
Bashorun said the appropriate national response should be an integrated farm-to-industry strategy that strengthens production, processing and refining simultaneously.
Refining Capacity Must Grow
Nigeria needs additional modern palm-oil processing and refining facilities strategically located near major production clusters.
However, increasing refinery capacity alone will not solve the problem.
Refineries require sufficient supplies of crude palm oil, while crude palm oil production depends on productive farms, efficient harvesting, effective aggregation and modern milling.
The entire value chain must therefore expand together:
Farms → harvesting → aggregation → milling → crude palm oil → refining → food and industrial manufacturing → export.
Modern mills can significantly reduce losses associated with delayed processing and inefficient traditional methods.
Additional refining capacity can then convert greater quantities of Nigerian crude palm oil into the refined products required by households and manufacturers.
A stronger integrated value chain would retain more value within Nigeria, create jobs and reduce the foreign exchange spent on avoidable imports, while positioning the country to compete more effectively in regional and international markets.
Put the Smallholder Farmer at the Centre
Nigeria does not necessarily need to depend primarily on massive new plantations to close its palm-oil supply gap.
A significant opportunity already exists within existing farming communities.
Thousands of smallholder farmers could substantially increase production if they receive the right combination of improved planting materials, agricultural extension, technology, finance and reliable market access.
This is where the Climate-Smart Agronomy Programme can play an important role.
Under a climate-smart palm-agriculture initiative, participating farmers could be supported with high-yielding and climate-resilient oil-palm seedlings, soil testing and appropriate nutrient management, rehabilitation and replanting of ageing plantations, improved water and soil-moisture management, integrated pest and disease management, early-stage intercropping and improved harvesting technologies.
The programme could also strengthen farmer cooperatives and aggregation systems, improve access to modern community-based mills, expand digital agricultural extension and farm monitoring, facilitate access to agricultural finance and insurance, and establish structured agreements linking farmers directly with processors and refineries.
The objective should not simply be to increase the number of hectares planted.
More importantly, Nigeria must increase yield per hectare, reduce post-harvest losses and ensure that a greater proportion of harvested fruit enters an efficient commercial processing system.
That is both an agricultural and industrial strategy.
Climate-Smart Expansion, Not Indiscriminate Expansion
Nigeria must also avoid equating increased palm-oil production with indiscriminate land clearing.
A modern palm-oil policy should prioritise increasing productivity on existing agricultural land, rehabilitating old plantations and bringing degraded agricultural land back into productive use.
Climate-smart production should protect forests, biodiversity, waterways and soil health.
Expansion should therefore be guided by responsible land-use planning, environmental safeguards and traceability.
Nigeria has an opportunity to demonstrate that increased agricultural production and environmental responsibility do not have to be opposing objectives.
Build Rural Agro-Industrial Hubs
Palm-producing communities should gradually become centres of agro-industrial development.
A successful palm cluster could include nurseries, plantations, farmer cooperatives, aggregation centres, modern mills, refineries, storage facilities, transportation services and industries producing soap, cosmetics, food ingredients and other palm-derived products.
This would create economic activity far beyond the farm itself.
Young people could find employment as agronomists, machine operators, technicians, transporters, data specialists, nursery operators, processors and entrepreneurs.
Women, who already play significant roles in many agricultural processing communities, could participate more strongly in aggregation, processing, enterprise development and cooperative ownership.
Such development would strengthen rural economies and help reduce the economic pressures driving rural-to-urban migration.
Turn the Import Bill Into an Investment Agenda
Nigeria should study its palm-oil import statistics differently.
Every tonne imported is not merely evidence of a deficit. It is also evidence of existing Nigerian demand waiting to be supplied.
If manufacturers are purchasing imported palm oil, the market already exists.
The policy question should therefore become:
How much of that demand can Nigerian farmers, processors and refineries competitively replace over the next five to ten years—and how quickly can Nigeria move from import substitution to export competitiveness?
Nigeria should establish measurable targets for reducing the domestic supply deficit through increased smallholder productivity, rehabilitation of existing plantations, modern milling and additional refining capacity.
Imports may continue to play an important role while domestic production expands.
The objective should not be an abrupt ban that creates shortages or increases food and manufacturing costs.
The objective should be competitive import substitution through productivity, followed by the development of an export-oriented value chain.
Nigeria should reach the point where manufacturers choose locally produced palm oil because it is reliable, traceable, competitively priced and available at the required quality and scale.
Once domestic demand is adequately supplied, increased production and refining capacity could create opportunities for Nigeria to serve regional and international markets with higher-value palm-oil products.
From Deficit to Domestic Strength and Export Opportunity
Nigeria once occupied a dominant position in the global palm-oil industry.
Rebuilding that sector will require more than nostalgia about the past.
It will require investment, science, modern agronomy, infrastructure and a deliberate partnership among government, farmers, researchers, financial institutions and private industry.
The present supply deficit can become the catalyst for that transformation.
Nigeria has the farmers.
Nigeria has the agricultural land and ecological zones capable of supporting oil-palm production.
Nigeria has the population and industrial demand.
What is required is a coordinated value-chain strategy that connects climate-smart farms to efficient mills, efficient mills to modern refineries, and modern refineries to Nigerian consumers, industries and export markets.
Through the Climate-Smart Agronomy Programme, smallholder farmers should be positioned at the heart of that transformation.
Nigeria should therefore not merely ask why it is importing palm oil.
It should ask how quickly it can transform today’s import demand into Nigerian agricultural production, Nigerian processing, Nigerian manufacturing, rural employment, domestic supply security and sustainable export growth.
Nigeria has the capacity.
The opportunity is already in the market.
The task now is to grow, process and refine enough palm oil to meet domestic demand—and build a strong export market from the strength of its own agricultural and industrial value chain.