Thompson Ayodele is the Director of Initiative for Public Policy Analysis, a public policy think tank promoting the institutions of free society based in Lagos, Nigeria. He attended Obafemi Awolowo University, Ile-Ife, Nigeria, where he got a degree in humanities, and Kwara State Polytechnic, Ilorin, Nigeria, where he also received his Diploma in Law. Prior to his work with IPPA Nigeria, he was a journalist with “The Comet.”
Mr. Ayodele was Deputy Country Director, Students In Free Enterprise (SIFE) Nigeria from 2002 to 2006. He is currently a coordinator of Malaria Free Zones, a Hedge Fund/Free Africa Foundation Project, in Nigeria, Cameroon and Benin Republic.
Mr. Ayodele is an avid writer and has written several articles. His articles have been published in the New York Times, Financial Times, Australia Financial Review, This Day Nigeria, Daily Independent Nigeria and New Age Newspapers. He is the author of the upcoming publication: “Why Informal Business Thrives in Nigeria.”
He has just completed a six-month research study “Entrepreneurship vs. Poverty” for Independent Institute. Mr. Ayodele has traveled widely and is a Fellow of International Policy Network, London.
When people in the rest of the world think of Nigeria, what they readily think is oil, the “black gold” that dominates the Nigerian economy. But if the Nigerian government and business leaders play their cards right, Nigeria will be known for another oil: palm oil. If so, this will mean a new and better day has dawned for Africa’s most populated country.
Over half of the Nigerian labour force works in agriculture. However, Nigeria’s food sector lags behind the rest of the world. According to the International Food Policy Research Institute, “the overall prevalence of stunting, wasting, and underweight [in Nigeria] are 42.0 percent, 9 percent and 25 percent, respectively.” We can and must do better.
To unlock Nigeria’s full potential, and move it beyond its reliance on petroleum exports, it is imperative that the country launch an agricultural revolution. A linchpin of any Nigerian agriculture boom will be palm oil. The cooking oil and food additive is a nutritious and calorie-rich staple product. It also grows well in Nigerian soil and benefits from its long growing seasons and lush climate.
Indeed, Nigeria, once boasted a proud palm oil industry that was able to meet the country’s domestic demand. Nevertheless, today, after years of stagnation and over reliance on oil and gas, Nigeria is now a net importer of vegetable oils. This has proven costly to the country and its consumers. Rural communities have missed an opportunity to rise out of poverty and achieve food security. How can Nigeria reverse this lamentable state of affairs?
Every modern agricultural revolution consists of two key ingredients – capital investment and state-of-the-art technology. Over the last few years, the Nigerian government has pursued important legal reforms with an eye toward making the country a more attractive place to invest and decreasing its reliance on the oil and gas sector. It’s time for those reforms to bear fruit.
Fortunately, there is a good model for Nigeria to follow. Several countries in tropical Asia, including Malaysia and Indonesia, reformed their laws with an eye toward modernizing their agriculture sectors. The reforms attracted huge sums of investment capital, from China, Australia, and elsewhere. Flush with capital, Malaysian and Indonesian farmers and entrepreneurs procured world-class technology to develop their banana, cocoa, and palm oil sectors, among others. Two generations ago these countries were as poor as sub-Saharan Africa. Today they are growing fast and are now net exporters of palm oil.
Nigeria can do something similar. Global investors are increasingly interested in developing the African palm oil industry. Every day, representatives of capital-rich companies and governments descend on Lagos, Accra, Monrovia, and other West African capitals to scout for opportunities.
Nigeria should use this opportunity to develop its domestic industry. It could bring to Nigeria the same prosperity enjoyed in palm oil producing countries of Southeast Asia, countries that have climbed to the ranks of middle income nations and higher. The need to modernize grows larger every day. After all, Africa’s population is expected to more than double by 2030. Nigeria alone will be a significant contributor to this growth, with increasing multitudes of mouths to feed.
To meet the challenges of the future head on, Nigerian policymakers should set two goals for the country. The first is to produce enough vegetable oil to satisfy the country’s growing domestic demand. The second is to grow the sector even larger, so Nigeria becomes a net exporter of palm oil. Producing ample quantities of palm oil is needed to feed a growing continent, to diversify the country’s export sector, and to attract foreign currency reserves. The successful cultivation and development of major agricultural industries can help deliver genuine food security to Nigeria. They can also provide vital employment for communities that have historically suffered from lack of job opportunities.
Some of those poised to benefit most from an agriculture boom include Nigeria’s legions of long-suffering smallholders. There is a precedent
here: Malaysia’s Federal Land Development Authority (FELDA) promoted growth that empowered and enriched that country’s smallholders. They helped bring hundreds of thousands of Malaysians out of poverty and contributed to infrastructure development and social services. Liberia is already in the process of successfully emulating Malaysia’s smallholder experience.
Nigeria has been stuck for years, burdened with a resource curse in the form of an over-reliance on its huge petroleum industry. By modernizing its agricultural sector, Nigeria will enter an era of resource blessings –feeding its people and its neighbors and ensuring a brighter economic future.
Africa’s future is exceptionally bright if it can harness the full potential of its people and its natural endowments and palm oil is set to be a big part of that future
THOUSANDS of policy makers from around the world will attend the global climate conference in Durban next week. Their stated aim is to promote "sustainable development". This means ensuring countries harness economic growth to raise living standards while preserving a healthy natural environment. Africans must pay close attention, however, as the conference will feature participants hostile to robust growth on the continent.
Two areas will be in particular focus in Durban: food and energy security. Poor countries need to take advantage of high- yield, high-calorie foods to feed their people as their economies grow; and all the nations of the world must use the cleanest and most cost-effective fuels.
Africa can meet this challenge, but not when protectionist anti growth activists stand in the way. Take palm oil, for instance. This natural oil harvested from the palm helps to feed a hungry world and power growing economies. Palm oil is a source for calories throughout the developing world, particularly in Africa, where the plant originated. For at least two generations, policy makers and businessmen have invested in oil palm plantations to support domestic food security. At the same time, biodiesel derived from palm oil is proving to be a clean and cost-effective source of power.
Agriculture is vital for Africa’s development. Countries such as Kenya, Liberia, Ghana, Nigeria and Uganda are using crops such as palm oil to support economic development and improved infrastructure. Although Africa accounts for only 4% of the world’s palm oil production, West Africa has attracted $6bn in investment in this sector and this is likely to rise. In countries that desperately need new investment and jobs, such as Liberia and Uganda, hundreds of thousands of hectares are being developed to produce this crop. Palm oil has encouraged s outh- s outh investment, with Malaysian firms investing in Uganda. With palm oil, African agriculture can be a significant player in feeding and powering itself and the rest of the world.
These much-needed agricultural investments are creating thousands of jobs, providing livelihoods for African families and helping pay for education and healthcare. But it’s too soon to pop champagne corks. There are well-organised and deep-pocketed obstacles to realising the full potential of palm oil in Africa.
First, many western environmental organisations are hostile to the continent’s rapid economic growth. They have sworn to prevent African countries from doing what they did decades ago in order to be prosperous. Some of the groups are familiar to the African public. Pesticide Action Network, for instance, has long opposed DDT and other insecticides for fighting malaria.
Other environmental groups have taken to other causes, such as blocking genetically modified food production across the world, which is a key source for alleviating hunger and starvation in parts of Africa.
So it is hardly surprising that "green" groups have found fault with the palm oil trade. It seems that any time Africans are keen to use their own resources, new technology and trade to better their lives, a European nongovernmental organisation (NGO) wants to stand in the way. These environmental NGOs will have a large presence in Durban and their propaganda campaigns against African development should be strongly resisted.
Interestingly, the World Bank has lately made common cause with the environmental NGOs. The bank recently decided to subject lending decisions to NGO preferences and standards. This undermines the ability of African farmers to benefit from palm oil expansion.
And the World Bank has even begun criticising investment in Africa, claiming it threatens the very farmers that stand to benefit from better infrastructure, cheaper input costs and greater agriculture opportunities.
It is reprehensible that an institution such as the bank, which was founded to advance economic growth in the name of world peace, would embrace an antidevelopment agenda. The bank will also have a significant presence in Durban and should hear from Africans interested in having growth at the top of the agenda.
Africa’s future is exceptionally bright if it can harness the full potential of its people and its natural endowments. Palm oil is set to be a big part of that future. It is the responsibility of the men and women gathering in Durban to work with Africa and not against it.
• Ayodele is director of the Initiative for Public Policy Analysis in Lagos, Nigeria.