By Femi Folaranmi, Yenagoa
Psalm 126 says: “When God restored the fortunes of Zion, we were like dreamers. Then our mouths were filled with laughter, our tongues with shouts of joy. Then it was said among the nations, The LORD has done great things for them.”
Literally, this is what Mr. Solomon King, chief executive officer, Brass and Books Financial Services, intends to do with the recent launch of the digital platform, Oyel.ng, meant to restore the fortunes of palm oil as the new crude for Nigeria.
Records have showed that, after the abolition of slavery in the first decades of the 19th Century, there was a switch to trade in palm oil that defined the new trade pattern between Europe and traders in the area to be later known as Nigeria. Europe was then at the height of its industrial revolution and the demand for palm oil was high because it was used to lubricate machines. At the height of the flourishing business, the palm oil being exported from the hinterland of the Niger Delta was equal to half of the total export from Africa. According to Mr. Morris Alagoa, present-day Bayelsa and Rivers states were known as Oil Rivers not because of crude oil but palm oil: “It was flourishing oil palm trade during the legitimate trade era that recognised it as such after slave trade was abolished. Not just the oil from palm fruit, the kernel was also useful. These were produce from the Niger Delta, which helped in promoting industrial revolution, turning wheels and machines.”
But crude oil came and took centre stage, relegating palm oil to the background. The palm oil trade in Nigeria has nosedived such that Nigeria, a major exporting country of palm oil in the past, is now a major importer. Nigeria’s output is now less than 2 per cent of global output.
Recently, Mr. Bernard Okata, deputy director in the Federal Ministry of Agriculture, painted a sad picture of the palm oil trade. He said, “There is a gap. We import to make up for this gap, and Nigeria is spending about $500 million annually for this importation up till now.”
Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, echoed Okata’s lamentation when he pointed that it was a sad fact that the country was still importing palm oil in spite of sufficient arable land in the South-South and South-East regions to produce it.
According to experts, Nigeria has a challenge in meeting its demand for oil and it would require about three million metric tonnes by planting about 100,000 hectares of palm oil.
This is where Kings comes in with the Oyel.ng digital platform, to make trade in palm oil attractive to investors. Ms Apina Felix, head of corporate communications, Brass and Books, said: “The platform affords both retail and institutional investors the opportunity to enjoy incredible returns on their investment by purchasing farm or processing units, selling for as low as N50,000 with investment span ranging between six to 36 months.
“With an annual shortfall of palm oil supply of over 600,000 tonnes, the opportunity in the oil palm market is enormous and Oyel.ng is democratising access to these opportunities.”
Kings explained the plans to revolutionise the oil palm trade to make the desired impact: “There is a lot in the commonwealth value chain that a lot of people have not been able to access. I think, more importantly, for us is the gap between the demand for palm oil and the supply available. Presently, in our country, we have about 600,000 tonnes gap in need for palm oil and, globally, that is even more pressing. I have always been somebody who has studied the palm oil global chain; being somebody who does business in Bayelsa, I have always thought, what do we have here that is exportable. So, competitive advantage, comparative advantage, palm oil was one of the agricultural products that we looked at to develop and promote.
“There is a comparative advantage for it here because South-South and generally, in the Niger Delta of Nigeria, we are the only ones who have the soil texture. If you go up north, you can’t find palm if you go down south to certain areas, you can’t find palm. So, South-South and South-East are places where palm is. If there is demand and we have it, we just thought that, as business people, we should take advantage of what we have.
“Palm oil is the next crude, if the people and government are serious to maximise the advantage nature has bestowed on them. There are several derivatives of palm oil, globally.
“There are different kinds of oil that you get from the palm fruits. There are different derivatives: palm oil, groundnut oil, like they call it now, serum, ethanol, and so many derivatives from palm oil, the way you have from crude. And every part of the palm oil itself is useful. From the bark to the trunk itself, to the kernel, to the shell, every part of it is useful. So, it is as lucrative, if properly done.
“For example, whole economies like Indonesia, Malaysia depend only on palm oil and we have it in abundant here and really do nothing with it.”
Kings explained that what the digital platform has done is to democratise palm production to revamp the economy and make money for people.
His words: “First, there is a platform that will democratise palm oil production. To do palm oil at a low level with a high standard, you will require equipment, you will require a mill that works well. Beyond the equipment, even the kind of equipment, because milling is already going on in Nigeria, even in Bayelsa there are several mills. But there are no mills that meet international standards. So, what our platform does is to help Nigerians invest in acquiring such mills and invest in the global distribution of palm oil because we are using our contacts and our networks to ensure that we don’t just mill palm oil here, we ensure that it is first up to international standards and it can be distributed to the global market.
For example, Aliko Dangote, in 2018, imported a shipload, and I mean a whole ship of palm oil. Palm oil is still being imported to Nigeria today. So, it means that there is a value chain there that has space that Nigerians don’t have knowledge about. Secondly, if they have the knowledge, they don’t have the capital. But with N50,000 you can buy retail units for a while and sell and make profit.”
He continued: “So, the platform provides an education because, if you are going to invest in something, you have to know about it. The platform provides an education, provides you access to that market. Without a platform like ours, you cannot go to Bayelsa and say you want to invest in palm oil; they don’t need your money, they won’t take it from you. They already have buyers; they already have equipment. So, how are you going to come into that game? Except you want to do it locally and, if you want to do it locally, the profitability in the local palm oil mill is very low. That’s why you have several local millers but not enough palm oil.
“We also would help Nigerians have their own palm estates. What that means is that, for example, the upstream allows you to own a plantation, each plantation is the minimum of one acre, that is six plots of palm trees that you would cultivate, plant and it will begin to yield for you in 18 months.
“You can’t do these things by yourself without the knowledge and even if you have the knowledge you need the manpower, the structures, which are the things that we have put in place. And so the platform allows you to engage in these farms. Up until, now what we always do is that we buy or lease existing farms, cut the trees, get the bunches and mill; but now Nigerians are able to own plantations in their names and then you know that this is what you are investing in.
“We have such properties in Bayelsa, Edo, Rivers and Ondo states. So, we have those plots of land and we already have MOUs signed. So, as the monies come, we help you buy the land, cultivate for you, we mill and sell; the only thing you have to do is just get money.”
Kings believes, in the face of upheaval in the global economy occasioned by the COVID-19 pandemic, agriculture should be the thrust of a serious government and, with the right incentives, it would attract more investments.
Alagoa, using the example of his youth, agrees with Kings on the steps to restore the fortunes of palm oil.
“My grandfather, Adaka Goki, was famed for his prowess in palm cutting and production of related products. Unfortunately, the attention given to palm oil has been significantly eroded. You would hardly see anyone engage in palm oil production. It is a sad commentary indeed. There is every need to encourage and revive that very important aspect of our people and communities. Besides helping us to be self-sufficient, it is also true that palm oil is more expensive than crude oil presently. The application of technology would help, especially in milling and having plantations with high-yielding improved varieties,” he said.