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Making CBN’s palm oil boost package work

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AHEAD of the anticipated inauguration of the second tenure of President Muhammadu Buhari, the Central Bank of Nigeria, CBN, has taken another bold step towards the actualisation of the nation’s economic diversification agenda by shifting the focus of the highly successful Anchor Borrowers’ programme to the palm oil sector. Rice production had taken the main benefit of the programme introduced in November 2015.

Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele

To this effect, the CBN Governor, Mr. Godwin Emefiele, recently invited the eleven governors of the South East and South-South, the main palm oil belt of the country, to discuss how the bank’s plan to guarantee loans at nine per cent interest to prospective participants in the Anchor Borrowers’ scheme will be able to at least double Nigeria’s palm produce supply to the world market within the next three to four years.

Malaysia, one of the Asian tiger economies realised nearly $20 billion from palm products alone in 2018. That amount is almost enough to fund our 8.8 trillion Naira 2019 Federal draft budget which is approximately $25 billion. On the other hand, Nigeria had fallen so far back in palm oil production that it spent N116 billion on palm oil imports in 2018. This is a country where wild palm trees still command much presence in our forest landscape.

Palm products, like other agricultural outputs that sustained the Nigerian economy in the 1960s, became neglected due to the advent of crude oil in the Niger Delta which Nigeria has totally depended upon for over 50 years for her foreign exchange needs. This, in turn, has predisposed our economy to the vagaries of the crude oil market which now faces a bleak future due to the war against climate change and disruptive technology.

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In view of this, the CBN’s proactive move to help revive the palm oil industry is highly welcome. Many palm oil producing states have, for decades, made a series of efforts to revive their moribund plantations with improved varieties. Some have even gone into private/public partnerships with local and foreign investors but due to corruption, mismanagement and lack of sustainability, very little has come of these efforts.

We hope, in its interactions with the state governors the CBN, backed by the Presidency, will be able to pull off this ambitious partnership the same way it was able to help the rice sector.

We also hope the CBN will be able to sustain the Anchor Borrowers’ programmes well beyond the foreseeable future. We hope political and regional sentiments will not come in and scuttle this programme which is in the overall national economic interest.

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