Nigeria’s palm oil imports from West African countries surge

by Josephine Okojie

December 19, 2017 | 5:38 pm
  |     |     |   Start Conversation
MUTSORA, EASTERN DEMOCRATIC REPUBLIC OF CONGO - AUGUST 8: A new soap factory that uses palm oil made possible by newly installed electricity lines, on August 8, 2013 in the Congolese town of Mutsora, DRC. The electricity is made possible by the ICCN Congolese Conservation authority hydro-electric scheme in Virunga National Park. This plant employs water drawn from natural flow and it will provide much needed electricity for industry in Mutsora, a town of over 30 000 people. Mutsora is in the "Block V" area of Virunga National Park. UK company Soco International PLC is planning to explore for oil in DRC's Virunga National Park, a protected World Heritage Site and most biodiverse park in Africa. (Photo by Brent Stirton/Getty Images for WWF-Canon)

Despite Federal Government efforts targeted at reducing Nigeria’s food import bill that gulps N5 billion annually and the inclusion of Crude Palm Oil (CPO) in the list of 41 items restricted from forex, the country has seen its imports of the crop from neighbouring West African countries rising rapidly.

In a press conference recently to stem the tide of the rising CPO imports into the country, stakeholders in the subsector stated that some West African countries are now transit routes for palm oil into the Nigeria under the ECOWAS Trade Liberalisation Scheme (ETLS), which is depriving the country revenue it would have generated in form of duties and levy.

To protect the country’s palm oil industry and spur the industry growth the government had imposed a 35 percent tariff (10% duty and 25% levy) on the importation of palm oil into the country.

“All available statistics point to the fact that the CPO export data recorded for some West African countries are actually exports into Nigeria from CPO that were imported into those countries. In essence, these West African countries are transit points for CPO destined for Nigeria,” said Emmanuel Ibru, chairman, Plantation Owners Forum of Nigeria (POFON).

“These countries earn their own duty, whilst they and Nigerian importers deny Nigeria from earning revenue. This should not be allowed to continue and we say a big no to ELTS crime.

“We need to expose further the ETLS antics. It is an indirect way of applying for waivers to import CPO and prohibited items,” Ibru added.

He called on the Nigeria Customs Service to conduct a forensic audit of all imports including ETLS imports to identify the defaulters and get them to make refunds to the government, empahsising that if duties were paid, it would not be profitable to import palm oil.

To protect the country’s palm oil industry and spur the industry growth the government had imposed a 35 percent tariff (10% duty and 25% levy) on the importation of palm oil into the country.

Also speaking during the press conference, Fatai Afolabi, executive secretary, POFON said that the inclusion of CPO in the country’s import prohibition list has brought about an increase in the country’s production in the last 10 years.

Afolabi noted that no West African country has the capacity to export palm oil into Nigeria, saying that Nigeria still remains the largest producer of the produce on the continent.

“No West Africa country has the capacity to meet their local consumption and export to other countries,” the executive secretary said.

He noted that Nigeria requires 450,000 tons to make up for her annual production shortfall while lamenting that the country imports more than the shortfall, making Nigeria a dumping ground for imported oil.

The executive secretary stated noted that Nigeria palm oil is less competitive to the imported ones owing to the high cost of production, infrastructural gaps, high logistics cost and the likes.

He urged the Federal Government to take a holistic look at the objectives of the ETLS to ensure Nigeria is not being shortchanged.

Data from Malaysia Palm Oil Board shows that exports from Malaysia to Ghana increased by 42 percent year-on-year from 163,095MT in 2016 to 232,287MT in 2017.

Also, exports from Malaysia to Benin increased by 13 percent year on year from 249,850MT in 2016 to 282,003MT in 2017.

Henry Olatujoye, president, National President, National Palm Produce Association of Nigeria (NPPAN), stated that the inability of government to provide a reliable data for the industry has remained a major problem for the industry, saying that some foreign investor are taking the advantage to deceive the government in allowing the importation of the produce into the country.

He added that some Indian investors always seek for reasons to keep importing CPO into the country under the pretense that the country’s CPO is of low standard.

Import of CPO from Ivory Coast to Nigeria increase by 1,382 percent from N282 million in q2 2017 to N4.2 billion in q3 2017, similarly imports from Ghana under the same period increased by 79 percent from N112 million to N200 million, according to data from the National Bureau of Statistics (NBS).


Josephine Okojie


by Josephine Okojie

December 19, 2017 | 5:38 pm
  |     |     |   Start Conversation

Big Read |  


What Nigeria must do before signing AfCFTA

Nigeria’s President Muhammadu Buhari last Wednesday gave a hint that he would sign the African Continental Free Trade Area (AfCFTA)...

MTN Banner ADS 2


Newsletter Fixed income