Yet, even as Nigeria’s palm oil imports from Malaysia and Indonesia dropped by over 25 percent in value in 2024, according to trade data, the road to self-sufficiency and global competitiveness remains long and fraught with structural, environmental, and institutional challenges.
The seeds of Nigeria’s palm oil revival were sown during Goodluck Jonathan’s presidency, under the stewardship of Akinwumi Adesina, then Minister of Agriculture and now President of the African Development Bank. The strategy was classic developmental economics: offer tax holidays, access to subsidised capital, protective tariffs, and land acquisition support to attract firms into backward integration, particularly into refining and plantation development.
This was not just industrial policy on paper. It attracted real capital. Firms like PZ Wilmar, Okomu, Presco, Dufil Prima Foods, and Agri Palm Limited collectively invested billions of naira into large-scale plantations across Cross River and Edo States. Some of these projects now span tens of thousands of hectares, producing palm oil for food, cosmetics, and increasingly, biofuels and aviation fuel.
According to the Food and Agriculture Organisation (FAO), Nigeria’s oil palm fruit production rose from 10 million metric tonnes in 2019 to 11.6 million in 2023, a 16 percent jump. Meanwhile, palm oil imports continue to decline, offering modest relief to the country’s volatile foreign exchange reserves.
For once, Nigeria appears to have gotten the basics of industrial policy right: pick a sector where the country has a latent comparative advantage, create the right incentives for capital inflows, and stick with the policy long enough for results to materialise. That alone is worth commending.
But celebration must not blind us to the deeper questions, many of which remain unresolved.
First, there are ecological and social concerns about the aggressive expansion of monoculture plantations. While state governments have helped investors secure land, there is little public scrutiny around issues of land tenure, displacement of rural communities, or biodiversity loss. As global investors tighten their ESG (environmental, social, and governance) criteria, Nigeria cannot afford to ignore these risks. The palm oil boom must not become another tale of growth at the expense of livelihoods or the environment.
Second, while demand from fast-moving consumer goods (FMCG) firms has driven domestic production, it is unclear how resilient this model is without continuous government support. Many of these investors enjoy import quotas, cheap financing via NIRSAL and the Commercial Agriculture Credit Scheme, and duty waivers on equipment. Should the fiscal space tighten further or these incentives be removed, will the sector remain viable or will investors pivot elsewhere?
Third, there is little evidence of value chain deepening beyond plantation and refining. Nigeria still lags in downstream applications, R&D, and global branding. The absence of significant investment in processing, packaging, or international marketing means the country is yet to tap the full economic value of its palm oil revival. Compare this to Malaysia or Indonesia, where palm oil is part of an integrated export-industrial complex with strong linkages to chemical, energy, and food sectors.
Finally, the regulatory environment remains underdeveloped. The absence of a robust monitoring framework for land use, sustainability compliance, and local content obligations could erode both investor confidence and social licence over time.
Despite these gaps, Nigeria’s palm oil story offers valuable lessons. It demonstrates that when incentives align with sector potential, the private sector can respond with capital and expertise. It also shows that some level of protectionism, when targeted, temporary, and transparent, can spur domestic capability in key sectors.
But the work is far from over. To turn this policy success into a lasting economic transformation, Nigeria must broaden its focus: from hectares to human capital, from plantations to processing, and from incentives to institutional resilience.
It must also navigate a shifting global landscape where sustainability is no longer optional. As the EU tightens rules on deforestation-linked imports and investors prioritise ESG metrics, Nigeria must show that its palm oil is not just locally sourced but also ethically produced.
Industrial policy is not just about growth; it is about balancing efficiency, equity, and ecology. Nigeria has taken a promising first step. But the real test will be whether the country can build an inclusive, export-oriented palm oil sector that can compete, not just survive, in a warming, more protectionist world.
