Gabon and the revolution of palm oil in Africa
London, May 23, 2018 (AltAfrika)-Gabon’s government has partnered with agricultural giant Olam to set up the largest palm oil plantation in Africa — over 82,000 hectares. The move promises to generate thousands of jobs, millions in revenue and some serious controversy
Libreville’s expansion has been fuelled by Gabon’s decade-long boom in oil production. But with oil prices plummeting and reserves declining, the central African country is scrambling to find a less volatile source of income. Bongo’s solution? Palm oil.
Nobody doubts the country needs to diversify its economy. Despite being a middle-income nation with fewer than 2 million citizens, poverty remains high and youth unemployment is at 36 percent. Employment is the only way to bring the country’s people out of poverty, says Bongo, who is keen to deliver results after his 2016 re-election was marred by accusations of fraud and violent street protests.
But palm oil comes with its own set of ghosts. After decades of mass production in Malaysia and Indonesia, the industry has become synonymous with deforestation, labour exploitation and chimpanzee murder. Showing Gabon can do better will be no easy feat.
Enter Olam’s CEO, Gagan Gupta. Based in Singapore, Olam is a giant multinational operating in 70 countries selling commodities like coffee, cocoa, rice and cotton. But Gupta’s small corner office feels like that of a high school baseball coach, with walls covered in motivational slogans like “We always strive to do the right thing” and “We dare to dream.”
Using foreign multinationals to help foster Gabon’s development is a “win-win,” argues economic analyst Emmanuel Leroueil, head of Central African operations for the Performance Group consultancy. The Gabonese government obtains access to Olam’s deep pockets and agricultural know-how while the multinational gets priority access to a new market. “It is an innovative model but it is proving successful,” says Leroueil.
Olam and the government say preserving the environment is their biggest priority. The company’s palm oil plantations are the first in Africa to be certified as “sustainable” by the Roundtable on Sustainable Palm Oil, and Bongo is adamant about Olam’s activities not hurting Gabon’s precious biodiversity. “I refuse to hear that sustainability and economic progress are incompatible,” he says. “We have planted thousands of hectares of palm oil without touching our forest!”
That’s not exactly true. Visiting Olam’s 20,000-hectare palm oil plantation in Awala, a couple hours’ drive inland from Libreville, signs of logging are everywhere. Huge piles of timber stand by the side of dirt roads. Among the palm trees, one can still see the muddy tracks of bulldozers. When asked about it, Olam admits to chopping trees to make room for the plantations but says they make up for the loss by identifying and protecting the most biologically rich stretches of the forest — what they call “High Conservation Value” areas.
Not everybody buys into this theory. Marc Ona Essangui, a renowned activist and executive secretary of the Gabonese NGO Brainforest, says “sustainable palm oil” is an oxymoron. Essangui insists that “Olam is cutting down more trees than they’re allowed to, and their pesticides are filtering into the water stream of neighboring communities.”
Despite the ecologist’s criticism, Bongo is committed to seeing Gabon become a palm oil pioneer. So far, the industry has already generated 7,700 jobs for locals and, despite the drop in oil revenue, the World Bank estimates the country’s economy will continue to grow at a yearly 5 percent — thanks, in part, to palm oil.
Meanwhile, investors are slowly buying into the idea of Africa as the next palm oil frontier. Two-thirds of the vegetable oil used in sub-Saharan Africa is already palm oil and consumption is expected to grow up to 10 percent annually. Sierra Leone and Benin are also investing in its production, trusting the continent can go from buyer to exporter. Gabon’s example, whether good or bad, could set the tone for a new kind of oil rush.