May 30, 2020

Palm Oil

Can Palm Oil Lubricate West Africa’s Energy Supply?

Malaysia and Singapore are two of the world’s leading palm oil producers. Nigeria’s claim to fame is that sometime in the 1970s it loaned Malaysia the oil palm seeds that germinated into the Asian country’s current distinction. But, about forty years after, palm oil production remains rudimentary in Nigeria, even with its great potentials for economic value.

By 2020, the world’s No. 1 palm oil producer, Indonesia, hopes to hit 40 million tonnes in output. By that year, Nigeria hopes to become one of the 20 largest economies in the world. The only snag is: Nigeria’s vision implies astronomical energy consumption and if biofuels from palm oil fit into that aspiration, there are many slippery spots on the way to watch out for.

Indonesia’s experience provides good examples of what Nigeria should guard against. Indonesia needed to cultivate more oil palm trees to rally its dreams, so it burnt down forests, instantly raising red flags from environmen-talists. There were concerns too about displacement of indigenous peoples. Unilever, the company with a hefty appetite for the oil used in food, soapmaking and other activities, blacklisted some Indonesian companies allegedly responsible for deforestation and peat clearance. As a result of these concerns in 2004 the palm oil industry developed an ethical certification system, making suppliers commit to preserving rainforests and wildlife.

So, Indonesia’s annual oil palm expansion has started declining. It has also reached a climate change agreement with Norway in which it commits to cutting at least 26% of its emissions by 2020. As at the year 2009, while Indonesia cultivated about 100,000ha of oil palm, Nigeria dedicated 8,300ha only for all oil crops put together. What of Brazil? It is planting plant palm trees in the Amazon for $702 million in the hope of meeting its own energy needs with 120,000 tonnes of palm oil used to produce biofuel, and exporting the excess.

According to the Special Report in this edition, Cameroon’s Rural Sector Development Plan ”is hoping to increase palm oil production to 300,000 tonnes in 2015 and 450,000 tons in 2020.” One of the Malaysian companies accused of being responsible for deforestation and peat clearance, Sime Darby, has been given 300,000ha for a $2.5 billion plantation. Now, NGOs and rights groups are kicking against the deal, among many others which they say strip local communities of their prime resource.

Thus, the picture that emerges is of a strategic produce that can effortlessly get soiled by social, political and customary issues beyond its control. West African governments looking to palm oil as a strategic product to invest in must deal with the potential challenges associated with the various stakeholders: smallholder farmers, local communities, environmentalists, etc. But, due to political and economic expediencies, very few can. There lies the slippery road for palm oil.

–Odoh Diego Okenyodo

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