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Analysts say Nigeria must be cautious on meting out sanctions on firms importing palm oil as local production cannot meet a surging demand.
Buhari recently directed the Central Bank of Nigeria (CBN) to blacklist companies importing or smuggling palm oil and other products into Nigeria, according to Central Bank Governor Godwin Emefiele.
Analysts say sanctions should be meted on firms smuggling the product into Nigeria, but not those importing it legally for factory use.
Palm oil importers have been restricted from accessing foreign exchange in the official market since 2016, but they can obtain FX from elsewhere to import. But the restriction from FX market has made importation of the product difficult, prompting people to resort to smuggling.
Nigeria produces 930,000 MT to 1.3 million MT, but demand is about 2.1 million MT, industry sources say.
Mogaji African Farmer, head of agriculture and agro-allied group, Lagos Chamber of Commerce and Industry, (LCCI) said such sanctions may do in consumer companies that depend heavily on palm oil for production.
“How will they survive?” he asked.
“We are heavy consumers and light producers. So, this policy that they want to do is a ‘no no’ for me. And if you also ask the experts it’s a ‘no no’ for them too,” he said.
“What will other companies that make soaps and detergents and vegetable palm oil do? What will happen to them?
“With climate change, are we sure that we will get the yields that we require and almost all the palm oil companies are complaining of labour. Even if there is land, there may be conflicts from the community,” he added.
He said it is critical to give importers one or two years before implementing the policy.
“Are they releasing long-term capital? Can they buy the … Read More...