How Sime Darby & Oil Palm production will help Liberia’s Economy – By Richard Sambulah

Oil palm is one of the fastest growing commodities in the world, which has many usages. For Liberia, a country noted for some of its traditional commodities, like rubber, iron ore, oil palm seems to be somehow new in recent times. From the sixties up to few years back, only two key commodities were known once Liberia  name was mentioned.

But today, the  story  is changing. At present, the world’s largest oil palm plantation, Sime Darby, entering Liberia  added more value to the oil palm sector. Now, many Liberians are gradually becoming oil palm farmers.

There are many reasons for their action; some believe that   the country’s economy will be greatly enhanced by investing in oil palm.

These statements were once buttressed by Liberia’s Finance minister, Amara Konneh.  At one of his visits to the company’s plantations,  Konneh spoke of the importance of oil palm to the Economy of Liberia. Like he had stressed earlier in May at the launch of Grow-Liberia, Minister Konneh reemphasized the bountiful benefits of the agriculture sector and, specifically, what the oil palm sector promises for Africa’s oldest independent nation.

Indeed, the future of Liberia looks bright regards the oil palm sector, especially taking into consideration the number of worthwhile companies and lucrative concessions they have with the Government of Liberia. Sime Darby has a 63-year concession agreement for 220,000 hectares of land in Grand Cape Mount, Bomi and Gbarpolu Counties. Golden Veroleum has a 65-year concession in the southeast—Sinoe and Grand Kru for 500,000 hectares of land. Equatorial Oil Palm (Palm Bay) has another in Grand Bassa County. Maryland Oil Palm Plantation in Maryland County has a 25-year concession agreement for 35,000 hectares of land. These four oil palm concessions do promise a lot for the Liberian economy and with that have the potential of bettering the lives of ordinary Liberians.  

This, according to Samuel Jackson, a Liberian economist, once confirmed this. “I think that  oil palm will help the economy greatly. But this depends on how well the government will address some fundamental issues. Oil palm prices have plummeted  in recent times. But that will not remain at that level. This has also happened to  Iron Ore too. But for us in Liberia, oil palm is a new  commodity. Sime Darby is a world class company and I think their presence in Liberia means a lot for the economy.”

At the moment, Sime Darby plans to set up an oil palm processing plant. Already, an eight ton and thirty ton mills have been brought into the country.  According to company sources, the eight ton plant is expected to start production by December 2015. This will greatly help improve  the country’s economy.  But the thirty too plant  is being set up at the same time. This  will  become functional next year.

“We think this is very important for the company and for the company. Once that starts, we will export to other countries,” a top official at Sime Darby said.

The potential transformation the oil palm sector holds for Liberia’s future does not just lie in the mere reason that there are a number a concessions agreements already signed, or that the oil palm concessioners are renowned. Actually, it is the replenishing nature of the sector and the characteristics of the production of oil palm that presents a real opportunity for Liberia to harness the benefits of the agriculture sector.

The Liberian economy has been on the path of growth, except in 2014 when a deadly Ebola outbreak stalled that steady growth. For instance, the Liberian economy grew by 7 percent in 2012, the third highest in all of sub-Saharan Africa and one of the highest in the entire world. Before Ebola, the Liberian economy was projected to have grown by eight percent. This could lead to a double-digit growth in few years onwards.

However, the country was still and is still faced with the economy challenges that have negatively impacted human as well as infrastructure development. With bulk of the contribution to Liberia’s growth from revenue generated from the extractive sector, the United Nation has always urged the country alongside other African nations to concentrate on the agriculture sector.

The UN and other agencies   speak due to vast knowledge they have in this sector and how this has helped transform some economies in the world like Malaysia, Indonesia and others.

Liberia has not done well since its founding in the area of agriculture. The Liberian economy is an import-based economy, with emphasis on mining and of late oil which commercial quantity is yet to be determined. Arguably, the largest producer of rubber in the world, Liberia has not been able to translate such profile into human development, with high illiteracy, maternal mortality rates and, among others, the lack of basic social services and infrastructure—road network and power, just to name a few. This is mainly because all of the country’s resources are exported, with a very meager labor to extract these resources from the ground or, with the oil sector, the lack of human capacity for exploration.

While the rest of the agriculture sector grapples with challenges—for instance rice farming is yet to be mechanized and people still accustomed to subsistence farming—the oil palm sector, backed by legislated concessions, including the planting and production of the tropical crop, will surely avoid the mistakes and challenges of the extractive sector and with other crops in the very agriculture sector. For instance, according to the 2009 concession agreement between Liberia and Sime Darby, the Malaysian oil palm giant is to develop 220,000 hectares.

This does not just mean that the company will hire only during planting (nursery) period of its plantation but also a lot more jobs when the plantation is fully grown and the company begins production of oil palm from mills right in Liberia. This means that there will be many jobs and a lot of poverty alleviation, which has stunted development in Liberia for as long as old as the country.  

The oil palm industry can provide a lot of jobs by far more than a lot of other industries  due to its pliable nature. Oil palm can used to produce several products such as mayonnaise, butter and cooking or vegetable oil. It can be used to produce biofuels, detergents (soap and washing powder) as well as cosmetics. The production of all of these products require huge labor. Of course, companies dealing in some of these products could be encouraged to establish subsidiaries in Liberia that will spur the booming of the micro, small and medium enterprises (MSMEs).

With these it is clear that the oil palm industry will not revolutionize the country’s economy and send a huge wave of reform in all sectors of the economy and then pretty much inform future concessions in any other sector. Rice could by then be mechanized and the country begin producing its own staple; emphasis could not be made in concessions of local production of goods and services for more economic impact. Such wave of reform will be continuous as the replaceable nature of the oil palm sector. There could be a complete end to Liberia’s years of sweetheart concessions.

The only challenge here is with the environment. Locals must be knowledgeable of the concessions that will impact them, working  with the communities must be encouraged, then oil palm concessions must be made to stick to environmentally accepted practices and principles laid down by the Roundtable on Sustainable Palm Oil (RSPO).

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