Nigeria’s Palm Oil Production Remains Stagnant Despite Oil Giants' Growth

Two key questions the article answers:

-Why is Nigeria’s palm oil production stagnating despite strong financial performance from companies like Presco and Okomu Oil?

-Why are palm oil imports into Nigeria increasing even though the country has large domestic producers?

Nigerian oil production giants, Okomu Oil Palm Company and Presco Plc, have reported growing revenue and profits in recent months. For example, Presco documented a 57.28% increase in profit before tax for 2025, while Okomu Oil saw a 63.64% jump during the same period.

These two companies, along with others in the same industry, profit from selling crude and refined products of oil palm in Nigeria. According to their financial reports, exports account for less than 30% of their revenues, meaning the bulk of their sales are within the domestic market.

Production Levels Remain Flat

Despite strong corporate performance, Nigeria’s primary palm oil production has shown little growth in recent years. Statistics from the United States Department of Agriculture indicate that the total area under palm oil cultivation has remained around 3.2 million hectares from 2022 to 2025, while output has hovered at approximately 1.5 million metric tons (mt).

The Council of Palm Oil Producing Countries places Nigeria’s latest production estimate slightly higher at about 1.57 million mt.

For years, imports have helped meet Nigeria’s palm oil consumption needs. Although the period leading up to 2025 saw restrained demand for foreign products—likely due to restrictive policies introduced during the administration of Muhammadu Buhari—imports have begun rising again.

Between 2024 and 2025, the World Bank reported that Nigeria’s palm oil import volume and value increased by more than 370%, as demand outpaced what local production could supply.

Structural Challenges Limit Expansion

Despite investments by Presco and Okomu in expanding plantations and partnerships with state governments, Nigeria’s palm oil industry is still far from meeting domestic demand. The country currently represents only about 2% of global palm oil production, highlighting the stagnation among domestic primary producers.

Nigeria’s ban on refined palm oil has also strengthened imports of crude palm oil, as industrial processors focus on refining and adding value locally. With national demand estimated at about 2.61 million mt, and rising alongside population growth, experts say stronger coordinated efforts are required to revive domestic production.

Industry analysts argue that the development of Nigeria’s palm oil sector cannot rely solely on the goodwill of private stakeholders but must be tied to clear economic and policy incentives. Expanding plantations across Nigeria’s vast arable land will be essential if the country hopes to close its supply gap.

Experts also note that low yields remain a major challenge. Many plantations across the country are dominated by ageing oil palm trees nearing the end of their productive cycles. Replanting with improved, high-yield varieties is necessary, but it is a long-term process.

Oil palm trees typically take about three years to mature and up to eight years to reach peak productivity. As a result, stakeholders say replanting efforts must begin immediately if Nigeria is to increase production significantly in the coming decade.