…Says Delta State never took a loan for farmers, only acted as a guarantor
By Shedrack Onitsha,
Delta State’s ₦25 billion commercial oil palm project—touted to lift two million Deltans out of poverty and create over 288,000 direct jobs—was abruptly stalled by a sudden policy reversal at the Central Bank of Nigeria (CBN), Barr. Felix Okonti, Secretary of the Delta State Commercial Oil Palm Plantations Growers Cooperative Society Limited (DELCOM COOP), has disclosed.
In an exclusive interview with
advocate.ng, Okonti said the project, which formed part of a ₦120 billion initiative across 14 states, collapsed after the new CBN leadership scrapped its development finance programmes to focus solely on monetary policy.
According to him, the Delta State Government never collected any loan from the apex bank but merely acted as a guarantor for the first ₦25 billion tranche—half of the ₦45 billion initial allocation—under a low-interest, long-tenor arrangement facilitated through FCMB.
“This was not a grant. It was a structured loan to be repaid by the oil palm growers,” Okonti explained. “The state only provided a guarantee, while DELCOM offered a counter-indemnity to protect that guarantee. The idea was to fund the project without exposing the state to debt.”
Okonti said a formal memo was sent to the state government and approved by the Executive Council, enabling Delta to participate in the first phase. The ₦45 billion allocation was split into ₦25 billion and ₦20 billion tranches due to the partnering bank’s lending capacity.
Birthed in 2020 under the Nigerian Oil Palm Development Initiative, the Delta project targeted 100,000 hectares of plantations and six 150 MTPH FFB oil mills. It was projected to create over 288,700 jobs initially—with the potential to exceed one million by 2032—while also producing 15,000 millionaires and over 1,000 billionaires within the state.
The blueprint emerged from a 2018 CBN-led stakeholder meeting with 14 oil-palm-producing states, where delegates agreed to close Nigeria’s 800,000-metric-ton supply gap, which costs the country $500 million in annual imports. Delta adopted a dual model—combining commercial planters with aggregated smallholders—to ensure both inclusivity and bankability.
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Soil sample collections[/caption]
However, challenges such as banks rejecting rural land as collateral slowed progress. While DELCOM secured state guarantees and approvals, the 2023 election season froze large payments as the Debt Management Office placed restrictions on disbursements.
“After elections, the new administration reaffirmed support,” Okonti said, “but at our next meeting with CBN, we were told the new governor had ended all development finance initiatives. That decision effectively killed our project and similar ones nationwide.”
The setback, he noted, blocked Delta’s ambition to move Nigeria from 11th to 3rd place in global oil palm production within five years, depriving 30,080 rural farmers, 168 companies, and 68 communities of the benefits.
Undeterred, DELCOM, according to him, has since secured a $900 million private equity deal from New York–based Rune Lube Corporation, signed in Accra in May, to fund the 133,000-hectare plantation project in two phases over five years.
Under the Community Land Use and Participation Model, land remains community-owned, with 10% reserved for smallholders, 90% for commercial planters, and 2% of profits paid annually into community development accounts. “This model has made communities our partners, not adversaries,” Okonti said.
Surveys, soil profiling, and environmental assessments have been completed in 29 communities, with project managers appointed for six plantation clusters—each to have its own oil mill and power generation capacity.
“The entire pre-development process will cost over ₦150 million, covering community engagements, stakeholder meetings, and fieldwork starting September 1,” Okonti stated. “This phase will ensure our programme—and our political commitments—meet international standards for responsible palm oil production.
For exports, our shipments must carry hologram certification to meet trade requirements in Europe, the United States, and other markets. But we are not focusing solely on exports—our palm oil and refinery outputs, from bathing soaps to medicinal products, will serve both local and global demand. Nigerians will benefit directly while we also compete globally.
Let me be clear to Deltans: the government is not borrowing a single kobo for this project. We have not received any federal funds. DELCOM members have personally funded pre-development costs, while the Delta State Government embraced the vision for its job creation, social impact, and ability to reverse rural-urban migration. Our target is 277,800 jobs across the state, from low-skill to expert roles—positioning Delta as Nigeria’s palm oil powerhouse.”
