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Producers ask Customs to account for 35% duty as Nigeria imports N75bn palm oil

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The valuable oil obtained from the kernel of the African oil palm, Elaeis guineensis was used for the production of biodiesel fuel (BDF).

The Plantation Owners Forum of Nigeria (POFON) has demanded that the Nigerian Custom Service should account for 35 per cent duty payable as export data from the Malaysia Palm Oil board has indicated that, from January 2018 to April 2019, Nigeria imported 354,868 metric tonnes of palm oil valued at over N75 billion.

In 2018, Nigeria imported 242,388t of crude palm oil and in the first four months of 2019, imported 112,480t of CPO to Nigeria, totaling 354,868 metric tonnes from Malaysia in 16 months.

Using the rate of $588 as the benchmark price per tonne as obtain from an international price index, the total value of CPO imported to the country from January to April 2019 from Malaysia alone was about N23,809,766,400 at the exchange rate of N360 to a dollar.

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Nigeria places 35 per cent duty on some products not manufactured in Economic Community of West African States (ECOWAS) countries, and crude palm oil is among the products.

Palm oil is also included in the list of 42 items which forex are not officially permitted at the Central Bank of Nigeria (CBN) forex windows.

Calculations indicated that 35% of the duty payable on the non-ECOWAS product imported from January to April should be N8,333,418,240.

However, if 10 per cent was used, the under-collected duty would amount to about N2,380,976,640. The shortage as a result of the under-collection of duty on the product from January to April 2019 would amount to about N5,953,441,600.

Likewise, the 2018 data indicated that the naira equivalent of 242,388 metric tonnes of palm oil imported to Nigeria was N51,308,691,840 at N211,680 ($588) per tonne.

If the Custom had collected the 10 per cent duty of N51,308,691,840, the value would be about N5,130,869,184.

But if the Custom had collected the 35 per cent duty on N51,308,691,840, the value would amount to about N17,958,042,144.

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With the 10 per cent duty, the country would have lost about N12,827,172,960 to underpayment of payable duty on crude palm oil imported to in 2018 alone.

When contacted, the Executive Secretary of POFON, Mr Fatai Afolabi, insisted that the Custom should disclose the total duty it collected on the product in 2018 and in the first four months of 2019, which value is estimated to be N75,118,458,240.

He also alleged that Crude Palm Olein, which is refined vegetable oil already banned in the country, was being imported under the guise of using the same abbreviation CPO, which could me Crude Palm Oil or Crude Palm Olein.

The Guardian investigation also disclosed that sources of smuggling of palm oil and vegetable oil into Nigeria include land borders in tankers and jerry cans; shipment into neighbouring countries and changing documentation to reflect West African origin so as to avoid 35 per cent duty; formal application seeking approval of the Federal Ministry of Finance to import CPO under ETLS and importation of refined vegetable oil as Crude Palm Olein, reflecting CPO which is not under import prohibition.

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Efforts to get the comments of the Nigerian Customs Service were unsuccessful as the Public Relations Officer of the Service, Mr Joseph Attah, had not responded to official mails and text messages sent to him after several telephone calls.

Meanwhile, the National Agency for Food, Drug Administration and Control (NAFDAC), through its Director of Publicity and Public Relations, Dr Jimoh Abubakar, admitted that though there were imported brands of vegetable oil in the market, it had been making efforts to sensitise dealers and retailers of such product to desist from dealing in them.

Abubakar also said though it was not NAFDAC’s duty to prevent smuggling, the agency always informs the Custom Service whenever such products are discovered.

“Our focus now is to even promote export of agricultural products processed in Nigeria. This will boost the economy, create more jobs and reduce importation of all we can produce,” Abubakar added.


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