As Nigeria struggles with economic challenges exacerbated by high unemployment, the National President of National Palm Produce Association of Nigeria, (NPPAN), Amb. Alphonsus Inyang in this interview says this is the time for the country to look inwards and see the hidden treasure in oil palm
Recently you brought some European investors to Nigeria, what exactly did they come for?
They came to look into the possibility of investing in oil palm in Nigeria. There is an office set up some few years back under the United Nations, that is the Investment and Technology Promotion Office (ITPO), with headquarters in Bonn, Germany, under the United Nations Industrial Development Organization (UNIDO), and the main purpose is to stimulate investments in the real sector and also in technology and how to apply technology to make the real sector attractive to investors.
The oil palm industry in Nigeria has been the way it has been. There have been no much new investments in it. So when UNIDO contacted me in March this year and told me of their intention to come to Nigeria with a group, a team of investors to stimulate investment in the oil palm sector, we agreed and I was appointed the local partner to UNIDO in the oil palm sector, I was mandated to facilitate their local logistics, assemble stakeholders in the value chain, smallholder farmers, and many of our members involved in National Palm Produce Association of Nigeria.
To the glory of God, on the 19th of November, a team of investors, 15 different companies, European investors, most of them from Germany, Italy, France, Belgium, and one from Malaysia came to Nigeria on a nine-day tour of Cross River and Akwa Ibom states. We met with the governors, commissioners and critical stakeholders, local investors in the oil palm value chain, and we thank God that everything went well. We visited some farms, some plantations, major mills, smallholder mills, around those two states, and then we had the last session in Lagos with financiers of the sector.
Now that they have come and gone. Can you tell us in dollars terms the investment these people are bring into this oil palm?
The total investment commitments is over 300 million Euros in Akwa Ibom and Cross River states in the next 24 months in palm wine production and packaging, utilization of palm trunk for furniture and replanting of old plantations/installation of Mills of up to 30,000 hectares. The Palm wine business alone is to create over 100,000 new businesses for tappers alone while the trunk business will create over 200,000 jobs in the two states.
Let me quickly say this. The companies that came were companies that produce premium seeds, very good seeds that are resistant to drought, resistant to pests, seeds that are produced for this part of Africa.
How long does it take for the plants to start fruiting?
The seeds fruit under three years, and the important thing is the yield, very high yielding seeds I can testify to that, about 40 tons of fresh fruit bunches per hectare per year. Among them is a Malaysian company that’s an expert in palm plantation management and one of the best in the world.
We also have companies that produce palm wine from spent palm trees and package them. Very interestingly, for export to Europe, not for local markets, they just want to extract the palm wine from the palm trees, process and package them here, and export them back to Europe where they have the markets. We have companies who want to use the palm trunk to produce building materials for the American market.
Most of their buildings are built with wood, and also produce furniture spare parts, furniture materials from the spent palm trunk. In other words, it’s a whole value chain. After extracting the palm wine, then you are left with the dried trunk.
We also have companies who want to buy palm oil mills effluents, the waste, the sludge. They want to buy them from any mill and use them to produce industrial products like biogas and export them to Europe and to America, even for the local markets.
We also have companies who are refining, and they are interested in investing in Nigeria.
Take, for example, the palm wine. Two processing factories are to engage at least 100,000 palm wine tappers. They train them in the latest technology, they release them to tap their wines and bring them to sell to them in the factory, process them and bottle them for export.
The palm trunk one will provide jobs and engagement for over 100,000, because most of these palm trunks that were planted in the 60s, 70s, 80s, are all spent, and they are useless to the smallholder farmers. They will now have to bring them down, and cut them into sizes, and the company will buy off from them and use them to produce furniture materials, and use them to produce papers, not necessarily for the Nigerian market, but for the export market. But even for the Nigerian market, we are importing all these things, like the high-density fiber (HDF), board, the medium-density fiber (MDF), board.
So, this company from Germany, Simon Moehringer GmbH, is to produce all these things from our waste, from our wild palms, and then create a multi-billion dollar economy within the country.
Talking about the governors you visited, what is their role in this investment?
The governors are to act as enablers in making the investment climate to be friendly for these investors to play. Take, for example, the people doing palm wine. They have to bring their plants.
They have to bring their technical skills and train the people. So, government can act as a way of mobilising the youths from across their states to be part of the programme. In fact, the information they gave us when they showed the statistics is that each of the 100,000 tappers in another three years will all become millionaires because each palm tree will give you 20 liters per day and for six weeks before it’s dried up.
And then we have farmers who have one hectare, two hectares of estates that were planted in the 60s, 70s, 80s. They are no more producing food or enough food for their economy. So, the palm wine and palm trunk thing is to create a new economy for the smallholders. So, the government is also to act as enablers in making the climate friendly and everything working and then the investment will start rolling in. Our association is there to facilitate, to make sure that everything is set for it to happen.
As an association, we are happy about this. The reason is that for Europeans who are interested in investing in oil palm business in Africa, it’s quite a good thing for us. And for UNIDO to make this happen for Nigeria makes us very happy.
And the agreement and the understanding we have with UNIDO is that they will see through this to fruition. So, we cannot wait to make it a success.
So, when are you expecting this to kick start?
All the people that came are chief executives of these companies. They are not managers. They are chief executives.
They need to go back. They say they need to close their books and close for the year. And by January and February, about six of them are coming back.
And before then, there are some jobs we need to do on ground. There are some assignments they have given to me.
There are things I need to put in place for them to come back. So, we are expecting investment to start rolling in as soon as possible. Now, we are on the pre-investment activities, getting things set, meeting, getting ready with stakeholders, signing documents and documentation and identification of areas of interest.
We have already identified the interests where they want to do business. So, now it’s for us to put them together before they come back. It’s a huge opportunity for us, and we cannot wait to see it start rolling.
Apart from Akwa Ibom and Cross River is there any plan to extend it to other states under your association?
Yes. They chose Akwa Ibom and Cross River because based on the statistics they have, those two states have the largest number of smallholder farmers, which is their target. And we had a meeting in Lagos with plantation owners from Ogun State, Edo State, Ondo State etc, JB Farms was there.
Incidentally, JB Farms is now the poster boy of the Nigerian oil palm industry. It’s the largest indigenous plantation owner.
In those states, we saw some plantation owners. There are some deals, there are some arrangements for private sector investments, which is not even part of the 300 million Euros I told you about.
So, yes, they’re also interested in other states, but in terms of the visit, they concentrated on two states.
They couldn’t go everywhere, that’s why they had the meeting in Lagos, to invite others from other states to join them, and that turned out to be very fruitful.
Generally, what is your message to the federal government in assisting institutions like yours making effort like this? What else do you want the government to bring on the table?
It is very simple. We have designed a model for the federal government to use to make Nigeria the third largest palm oil producing country in the world. We are currently number five at 1.4 million tonnes per year, a far cry from number one, Indonesia, which is doing 50 million tonnes per year.
Nigeria produces 1.4 million, not enough to take care of our needs. We have designed a model for the government that we can develop 2.5 million hectares between now and 2030, and that these 2.5 million hectares will mean 2.5 million households. If the government can work with us to aggregate 2.5 million households in Nigeria to develop oil palm at one hectare per household, then it will be the most ambitious and the most comprehensive programme of government ever.
Not the programme of sharing money to families, but the programme of putting factors of production in the hands of rural households and then turning them into millionaires. One hectare per household means them becoming millionaire families after three years. That is the model we have designed for the federal government.
The minister of agriculture is aware of this. The minister of industry, trade and investment, they have these documents submitted to them. We asked them to set up a presidential initiative for oil palm development, fund it directly from a special fund, and then we turn Nigeria into a N16 trillion economy through oil palm between now and 2030. It looks so simple. It sounds so cheap. Maybe that is why we are still waiting to hear from the government.
Well, I must also give it to the federal ministry of agriculture and food security.
They have recognized this fact. The Minister and the Minister of State are wonderful Ministers. They have set up a Technical Working Group on Oil Palm Strategy and Roadmap Development of which I am privileged to be the Vice Chairman of the technical working group.
Under the auspices of this group, we have submitted our model and strategy documents. The committee is still working. Based on the marching order of the minister, we should turn in our report by the end of the year.
But I want to plead with the President, Senator Bola Tinubu, to look into this report when it is finally submitted so that we can turn oil palm into a true Nigerian economy.
On the 8th of November, I was in Bali, Indonesia, as a presenter at the 20th Indonesia Palm Oil Conference. It was announced by Indonesia that they will no longer export crude palm oil to anywhere in the world. They will only export refined products, bio-diesel, bio-gas, and many other refined products of palm oil, which is the reason why we are seeing a sudden surge in the price of palm oil now in Nigeria and many parts of the world.
We consume palm oil, crude palm oil (CPO) directly in our foods, Indonesia doesn’t, Malaysia doesn’t.
They refine them into different products, where they use them in their food industries. They don’t use palm oil to cook soup. We use palm oil to cook soup.
Now they are no more exporting it to us. The sector is in crisis. That means we have to look inwards. We have to produce what we need.
We have the capacity. The households are there. The land is there. The people are there. The households are there. Let the government work with us.
The market is also there. We are the largest producers in Africa. We are also the largest consumers in Africa and yet we cannot produce enough for ourselves. Ivory Coast is the only country, the net exporter of palm oil in the whole of Africa. The size of Ivory Coast is one-third the size of Nigeria.
So if Ivory Coast can do it, Nigeria can do it with this model we have. This model will produce per hectare about 70 per cent less of the cost of developing plantations because the labor will come from the households.
The land will come from the household. Let Nigerians plant palm trees in their homestead, in neighborhoods, around the houses. Instead of mass production.
It will make sense. It will work for the environment. It will work for the people.
It will work for the economy of the people. And it is a veritable tool of putting factors of production in the hands of the people because they will always take something to the Market.