Oil palm business in Sierra Leone and its economic benefit


By Mohamed Massaquoi

With a capital injection from global investors, a long-abandoned palm oil plantation and mill in Daru in the Kailahun District, Eastern Sierra Leone is expected to produce over 5,000 tons of palm oil in 2014, and permanently employ more than 400 people.

Complementing its own plantation output, the Gold Tree palm oil business supports an extensive agricultural community, buying in fruits from over 5,000 out growers. It is working on significantly improving the fruit yields and technical skills of these smallholder farmers while militating against environmental risk and dangerous agricultural practices.

Palm oil rewards

Palm oil is used in a vast range of edible (cooking oils and fats, margarines, ice cream, etc.) and non-edible products (soaps, bio-fuels, etc.). The edible oil yield per hectare of a palm tree is typically more than three times that of soya or canola. Gold Tree operations are located in a classic palm oil climate, close to water, and a reasonable six-hour drive from the capital city Freetown.

Oil palm has been an important cash and export crop in this country. After the civil war (1991-2000), production has rebounded to around 195,000 tons despite the fact that government plantations are badly neglected, comprising mainly of aged, low yielding trees. The small-scale traditional system relies mainly on wild plants for production.

Cocoa and coffee are the two major cash crops historically, with some palm oil also being exported to neighbouring countries. Available data from the Ministry of Trade and Industry suggests that about 18,000 hectares are devoted to estate oil palm. In addition, there is a substantial amount of land in smallholder oil-palm production — perhaps 32,000 hectares. Almost all production currently takes place on smallholder plantations averaging 1 to 2.5 hectares in size.

The current government is actively promoting two export-oriented cash crops for the production of agro fuels: oil palm and sugarcane. For that purpose, the government created the Sierra Leone Investment and Export Promotion Agency (SLIEPA) as the country’s official agency “to assist and inform investors and exporters”. SLIEPA’s international and local consulting team is funded by the World Bank’s International Finance Corporation and the UK’s Department for International Development (DFID).

According to SLIEPA, Sierra Leone has a “pro-business government”, stating that “as a former businessman, President Koroma is focused on encouraging investment and private enterprise and continued streamlining of the “costs of doing businesses”. The same document explains that “the President and Cabinet have identified oil palm as a priority growth sector and are prepared to provide support at the highest levels to accelerate investment”.

As evidence of that, “the Sierra Leone Investment and Export Promotion Agency … is in the process of earmarking and preparing a number of suitable sites for 10,000+ hectare palm plantations”. Additionally, SLIEPA “has a team dedicated to helping agribusiness investors handle land, infrastructure and other issues.”

At present there are at least three European companies each seeking to lease 40,000 hectares in the country for palm oil for agro fuel for export?

The UK group Gold Tree – who recently closed a $19 million deal with Finn Fund for the production of palm oil in the country – plans to install an oil mill to process own and smallholder crops and plans to replant and expand old plantations at Daru in the Kailahun District and source from smallholders in the region.

Sierra Leone Agriculture (a UK-based group) has signed lease for 41,000 hectares and plans to develop 30,000 hectares of oil palm in the North-West of the country, starting with 10,000 hectares estate plus 5,000 hectares smallholders. Portugal-based group Quifel, with operations in Portugal, Spain, Brazil, Angola and Mozambique, has signed agreements with local communities in Lokomasama and Masimera to prospect for land for rice, oil palm, and sugarcane.

Although a government official admits that “there is ‘a lot of controversy’ on whether it is wise to invite, even bend over backwards to woo investors to lease huge tracts of Sierra Leone’s farmland to produce agro fuels for export in a country still trying to regain its own food security after a long civil war”, the government is moving forward very quickly along this road. As a result, corporations are starting to flow into the country in a land-grabbing process disguised under the terms “development” and “employment”.