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Nigeria is the fifth largest producer of palm oil in the world, despite having previously ranked first. Despite being a major producer, its population depends on the import of palm oil, reflecting a history in which Nigeria has lost the global palm oil market to Southeast Asian countries.
From the 1950s to the 1970s, Nigeria was the world's largest producer and exporter of palm oil, producing more than domestic demand and accounting for 40% of the global palm oil market. In that period, the agricultural sector was the main driver of the economy and the country's primary export source. Besides palm oil, Nigeria was producing peanuts, cocoa, cassava, and other crops in huge quantities. During that golden era, Nigeria easily dominated the global palm oil trade. Today, this dominance has disappeared. Nigeria's share of world production has declined from more than 40% in the 1970s to less than 2% in 2024, according to data from the U.S. Department of Agriculture.
In 2024, the president of the National Association of Palm Oil Producers in Nigeria, Alphonsus Anyang, revealed that Nigeria spends $600 million a year on importing palm oil. Foreign trade reports issued by the National Bureau of Statistics showed that crude palm oil and its derivatives topped Nigeria's agricultural imports, with values exceeding 100 billion naira annually.
Nigeria's rise in the 1960s as the world's largest palm oil producer was due to the availability of natural resources and colonial agricultural policies. The tropical climate has helped oil palm trees (Elaeis guineensis) grow naturally in the southern regions of the country, providing food and income for farmers in rural communities. Much of the palm oil produced during the 20th century came from wild forests rather than organized plantations.
Dr. Celestine Ekyonop, Executive Director of the Nigerian Oil Palm Research Institute (NIFOR), explained in a scientific conference that the colonial government established the Institute in 1939 as a research station to develop oil palm production within the Ministry of Agriculture in order to increase production from wild forests. In 1951, the station expanded to include other British West African colonies, leading to the establishment of the West African Oil Palm Research Institute (WAIFOR).
By the sixties, Nigeria had become the world leader in palm oil production and had the richest genetic stock of oil palm, attracting delegations from many countries to visit the nascent giant in West Africa.
Then came the oil era. Former Venezuelan oil minister Juan Pablo Alfonso described fossil oil as “devil's excrement.” Crude oil was discovered in the Niger Delta in 1958, and Shell obtained a license to begin large-scale drilling. By the mid-seventies, after only about 15 years, production had increased from around 5,000 to over two million barrels per day. This boom brought huge wealth to Nigeria. It became the richest country in Africa and among the richest countries in the world. Its revenues rose by more than 50% to reach a record level of 5.3 billion naira in 1976.
The government promised massive infrastructure development, electricity and improved living standards, but what happened was decades of corruption and financial mismanagement. The oil boom has shifted the government's focus away from other sectors. With this transformation, agriculture has been neglected, and palm oil production has declined sharply. Aged oil palm trees have not been replaced, small farmers have been left without support, and policies and research inherited from the colonial era have disappeared. The palm oil sector in Nigeria has entered a long-term recession.
FAO experts believe that the Nigerian civil war (1967—1970) played a role in the decline of the palm oil sector. The palm oil industry was concentrated in the southern tropical areas, especially the southeast and the south south. Studies show that the peak of the war in the late sixties and early seventies saw the destruction or abandonment of many oil palm plantations in these areas.
After the war, most of these plantations were not restored and new trees were not planted, which, together with the newly discovered wealth of oil, contributed to ending the boom in the palm oil industry by the late 1970s.
Today, Indonesia and Malaysia dominate the global palm oil market, producing over 80% of the world's supply. In 2024, Indonesia alone produced 46 million metric tons (59% of world production), followed by Malaysia with 18.7 million metric tons (24%). Nigeria, currently ranked fifth, produced only 1.5 million metric tons, about 2% of world production.
When Nigeria was the leader in production in the sixties and seventies, Southeast Asian countries such as Malaysia, Indonesia, and Thailand either had not started commercial production yet or were very late in production.
National Bureau of Statistics data shows that Nigeria imports from these countries, Ghana and Ivory Coast — two African countries that produce less than Nigeria. It is often said that Malaysia took oil palm seeds from Nigeria to start its own industry. Although this story has been revealed to be a myth, experts show that Malaysia exploited Nigeria's early research and rich genetic diversity in oil palm. According to Dr. Ekyonop, while Nigeria had huge genetic resources, Malaysia and Indonesia lacked them, so they visited Nigeria to obtain genetic resources and exchange agricultural materials.
While Nigeria has continued to rely on wild forests and small farmers, Southeast Asian countries have modernized the palm oil industry and provided capital and incentives for farmers to expand production. In Nigeria, oil palm farmers have been denied funding and support.
Today, many small Nigerian farmers have turned to the genetically improved and highly productive Malaysian oil palm variety, known as the Malaysian “Super Gene”, to increase productivity. They say this variety grows more quickly and produces more fruit compared to the local Nigerian variety known as “Tirina”. Victor Basi, owner of Tripoli Oil Limited in Benin City, says: “Most of the seeds we use are imported from Malaysia. This is the Malaysian super gin.” He described the variety as being short but growing fast and giving a higher yield than Terina.
Basie employs about 12 people in his project, which includes a refining plant and an agricultural nursery. He called for increased investment in agriculture and manufacturing to boost local production in Nigeria. He explained that climate changes sometimes affect oil palm cultivation, especially in the nursery phase. He lamented the fluctuating prices of crude palm oil (CPO), which is processed and refined to produce edible palm oil, and said:
“One of the challenges we face here is the climate. Another challenge is also the CPO price. The price hasn't been stable for a while. We buy CPO locally but factors such as transportation costs affect us. Sometimes even the food we provide to workers has become expensive. No one wants to run a losing business.”
Other farmers pointed to additional challenges such as weak government support, difficult access to land, and lack of capital.
Nigeria's palm oil production dropped to 1.12 million metric tons in 2018, causing national concern. In 2019, the Central Bank of Nigeria (CBN) launched the Oil Palm Development Initiative to reverse this decline and reduce dependence on imports.
The Central Bank confirmed that Nigeria was spending millions of dollars a year on importing palm oil, increasing pressure on foreign exchange reserves. The initiative aimed to establish 100 thousand hectares of farms in the short term and 500 thousand hectares in the long term. Smallholders, commercial farmers, and manufacturers have been granted low-interest, long-term loans. In addition, the central bank has restricted access to foreign exchange to finance palm oil imports.
According to reports, the bank has cooperated with eleven states in the southeastern and southeastern regions to implement the project. States have contributed to allocating areas of land for agriculture, while private investors such as Presco Plc, Okitipupa Oil Palm Ltd and Okomu Oil Palm Plc participated in the initiative. The goal was to significantly increase palm oil production in Nigeria in three to five years.
Source: The Republic
