Nigeria ‘losing millions of dollars’ to palm oil smuggling

The National Palm Produce Association of Nigeria (NPPAN) has called on the federal government to put an end to the smuggling of palm oil into the country.

In a letter addressed to President Muhammadu Buhari, the group said local producers lose $500m worth of palm oil annually to smuggling.

The group blamed this on the country’s porous borders.

It complained that local producers get no leverage from the federal government, adding that the “corruption” in the industry poses a threat to millions of jobs.

“The jobs of millions of Nigerian are at stake if immediate positive steps are taken to stop illegal entry of Crude Palm Oil (CPO) to Nigeria before it is too late. “Three years down the line of the life of this administration, we were called upon to go back to the land to produce food and agro-allied-input for our industries so as to give life to our economy,” the letter read.

“Our members under the auspices of the National Palm Produce Association of Nigeria (NPPAN) mobilised all its members to go back to all abandoned plantations and also encouraged the planting of new fields so as to increase the palm oil output of Nigeria, thus reducing the outflow of hard foreign exchange, as well as reducing unemployment.

“Today, the picture before the Association is as follows: We got little or no leverage from the government, critical among the expected leverage from the government are bank loans to our members nationwide;

“Our members had taken the risk to obtain loans running into billions of Naira from commercial banks and microfinance banks to reactivate abandoned plantations, within the last three years; we have output (CPO), no doubt increase tremendously within the last 24 months and the price of CPO have been stable (N300,000-N350,000) per metric tonne within the last 18 months up to October 2018.

“However, since November 2018, we have noticed a downward slide in the price of CPO and sharp drop to (N220, 000-N240, 000) per metric tonne in January 2019, even when the season (February-June) is yet to commence. We then wonder what the price would look like during the season, when CPO production is at peak.

“The local demand has waned. Even buyers from the Northern part of the country are no longer seen in the CPO producing states of the South. We also wonder if the industries and domestic use of CPO is no longer in place in such places. No doubt, industries and domestic users or consumers of CPO are definitely getting supply from other sources. These sources cannot be other than illegal sources via smuggling through our porous borders which are also corruption-laden.”

NPPAN called on the president to “immediately embark on pragmatic measures aimed at protecting the sector from imminent total collapse.”

It asked the federal government to “follow the footstep of Malaysia by setting up a privately-driven Oil Palm Development Commission to oversee the supply and demand of CPO”.