NIGERIA – Ganic Foods Limited, Nigeria based agrofood processing companies, has received a N16.56 billion (US$38m) Dual Tranche Export Development Facility from African Export-Import Bank (Afreximbank), a Pan-African multilateral financial institution.

The deal is designed to support Ganic in its construction of a Palm Kernel Expellers plant, a Soyabean Solvent Extraction Plant, as well as a Vegetable Oils Refinery– all located within an area in excess of 50,000 square meters at Odofin-Oke Village, along Shagamu-Abeokuta Expressway, Ogun State, Nigeria.

Financing the project, which is tagged at a total cost of N27 billion, shows Afreximbank’s support of development of a local substitute for imported edible oil – by locally producing high quality soya and vegetable oils – and thereby the reduction of Nigeria’s dependence on imported and, in some cases, smuggled edible oils.

This reduced exposure to imports is set to insulate Nigeria from the recent pricing volatility of edible oils on international markets, triggered by the war in Ukraine.

The planned development has the capacity to bridge overall production shortfalls and address the market gap driven by demand for high value edible oil.

Immediate benefits of the project include the creation of over 200 jobs with an estimated 1,000+ indirect labours and support for 2,000 local farmers in Nigeria– once operational.

Ganic’s project is timely as Nigeria is set to register a rise in production of palm kernel oilseed and soybeans in the MY 2022/23.

According to a recent GAIN report by USDA, palm kernel oilseed production is expected to reach 1 million metric tons (MMT), up by 11 percent compared to the USDA MY 2021/22 estimate of 900,000 MT.

While, soybean production is forecasted to reach 1.35 MMT, up 20 percent above the USDA official MY 2021/22 estimate of 1.117 MMT.

With increased investment in the sector both by private and public sector, palm kernel oil production during the period under review is forecasted to rise to about 440,000 metric tons MT, up over 12 percent above 393,000 metric tons (MT) of the previous period.

Soybean oil production in MY 2022/23 is set to reach 162,000 metric tons (MT), up over 9 percent more than the USDA official MY 2021/22 estimate of 149,000 metric tons.

The rise in production is attributed to initiatives such as the Central Bank of Nigeria (CBN) introducing foreign exchange restrictions on palm oil imports to encourage domestic production.

Nigeria’s per capita consumption of edible oils stands at 12.5 kilograms compared to the world average of 20 kilograms.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE.