African palm oil producers could suffer a big blow as the World Bank’s investment arm, the International Finance Corp. (IFC), suspended its $132 million annual investment in palm oil, which is also used a biofuel feedstock.
In Ghana alone, more than 27,000 farmers use palm oil as a source of economic livelihood. The Ghanaian biofuel industry is also one of the most promising within the African continent. However, that could quickly subside unless private investors pick up the slack left by the World Bank. In 2007 alone, the organization invested $12.5 million in the country’s palm oil sector.
Another West African nation, Nigeria, has nearly two million people employed in the palm oil sector. Moving east to Uganda, the government invested $52 million in partnership with the International Fund for Agricultural Development for the Vegetable Oil Development Project Phase 2, providing direct benefits to more than 136,000 families and local companies. The East African country announced plans to increase research to up its biofuel sector after proposing a law to have fossil fuel companies make a 20% biofuel blend for local consumption.
The debate over food versus fuel will continue to wage on, but the Director of the Initiative for Public Policy Analysis Thompson Ayodele said the statistics of how the sector has helped the economic livelihood of many Africans can’t be negated. “A wealthier society with a clear stake in its economy is far more likely to protect the environment and natural wildlife than an impoverished one,” he said. “This development has serious consequences for the industry as well as poverty alleviation in Africa.”
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