ECONOMIC IMPORTANCE OF OIL PALM PRODUCTION IN A DEVELOPING NATION: EVIDENCE FROM NIGERIA (1980-2025)

Abstract

This study examines the economic importance of oil palm production to a developing nation, using Nigeria as a case study over the period 1980-2025. Relying on secondary data, the paper adopts a descriptive-analytical approach that emphasizes growth trends, sectoral shares, employment and import substitution effects. The analysis shows that although oil palm production contributes a modest share of aggregate GDP, it remains a major source of rural employment and non-oil exports receipts, particularly in the Niger-Delta and southern forest-belt states. The sector supports hundreds of thousands to millions of direct and indirect jobs and has substantial potential for saving foreign exchange by reducing Nigeria’s dependence on edible oil imports. The paper argues that oil palm production, when combined with targeted smallholder support, rural infrastructure development and environmental safeguards, can serve as a powerful instrument for rural development and poverty reduction in Nigeria and similar developing economies. The paper examined the different stages the Nigerian palm oil industry has gone through over the years, as well as the contributions of oil palm production to the national revenue, the constraints/challenges encountered in oil palm production among other things. The paper also highlighted various applications of palm oil and palm kernel oil. Recommendations were made which included strengthening rural infrastructure and value addition as well as harnessing oil palm for poverty alleviation and job creation.