Africa's Cooking Oil Scandal: The Story of Extraction in Exchange for Ridiculous Import Bills

Africa hands over its palm groves, its sunflower fields, its groundnut and sesame harvests — raw, unprocessed, undervalued — and buys the finished product back at a markup, year after year, with the bill only climbing. This is not a supply gap. It is an extraction economy hiding in plain sight, and the numbers make the case better than any accusation could.

The Import Bill

Sub-Saharan Africa's food import bill is projected to hit $65 billion in 2025, a 4% increase from the $62.8 billion spent in 2024 and the third consecutive year of growth. Within that basket, edible oils rank as the second-largest expense category after cereals, driven by tight global vegetable oil supplies and limited palm oil output growth. Most strikingly, least-developed countries could see vegetable oil import costs rise by up to 58% compared with 2024 — a direct hit to household food budgets across the continent.

**Leading importers:** South Africa, Nigeria, Ethiopia, Kenya, and Côte d'Ivoire are Sub-Saharan Africa's top five food-importing countries, with edible oils a major line item in each.

- Nigeria— Once the world's dominant palm oil producer, Nigeria now produces between 1.4–1.5 million tonnes of palm oil annually against domestic demand estimated at 2.2–2.4 million tonnes, with some analysts placing consumption as high as 2.6 million tonnes. That gap underlies a roughly **$600 million annual palm oil import bill**.

- Kenya— Kenya consumes roughly 600,000 tonnes of edible oils a year, with 90–95% met through imports, costing over Sh145 billion ($1.1bn+) in 2022 alone. In the quarter to June 2025 alone, Kenya imported 183,139 tonnes of edible oils worth Sh25.61 billion, up from Sh23.97 billion the prior year, driven by 168,418 tonnes of palm oil (Sh23bn) sourced mainly from Malaysia and Indonesia, with sunflower oil imports more than doubling from 1,773 to 3,909 tonnes.

- **Egypt** — North Africa's heaviest oilseed importer; soybean imports alone are forecast at 4.2 million tonnes in MY2025/26, with domestic soybean production covering only about 2% of demand. Subsidised blended sunflower/soybean cooking oil reaches roughly 64 million Egyptians through the government's SMART card food subsidy programme.

- **Continental market:** Africa's own vegetable oils import market was valued at $553 million in 2024, growing at an average annual rate of +2.2% since 2013, with Nigeria, Ethiopia, and Algeria the largest consuming markets, together representing 34% of continental consumption.

## Leading Producers

- **Palm oil:** Nigeria and Côte d'Ivoire dominate West African production, though both fall well short of demand. Côte d'Ivoire is forecast to produce 600,000 tonnes of crude palm oil in MY2025/26, cultivated across nearly 400,000 hectares, exporting mainly to Mali and Burkina Faso, while the government deploys a $440 million, ten-year plantation modernisation plan. Globally, Indonesia leads with 32.34 million tonnes worth almost $35.9 billion in 2025, with Malaysia second — a stark contrast to Nigeria's 1960s peak of over 40% of global output, now fallen below 5%.

- **Sunflower:** South Africa is the continent's primary industrial-scale sunflower producer and exporter, with oilseed exports forecast to reach the second-highest level on record in MY2025/26 after maximising local crushing capacity. Ethiopia and Kenya are emerging producers, though both remain net importers.

- **Sesame, groundnut, shea:** Ethiopia and Sudan lead sesame; Senegal and Nigeria lead groundnut; Ghana, Burkina Faso, and Chad anchor shea — largely exported as raw seed/nut rather than processed oil.

## Intra-Africa Trade Potential

The opportunity is structural, not marginal. Intra-African trade is forecast to grow 10% in 2026 to $230 billion, up from $210 billion in 2025, driven by accelerating AfCFTA implementation. Yet African exports currently sit approximately $433.8 billion below their potential, and agricultural processing alone could lift export earnings by 42.3%. Ethiopia's growing sesame, pulses, and edible oil exports to Kenya under AfCFTA are already cited as a live case study of what deeper continental integration can unlock for oilseed value chains specifically.

## Processing Gaps and Opportunities

The scandal persists because raw material rarely becomes finished oil on the continent:

- **Crushing capacity deficits** — South Africa is expanding crushing utilisation only now; most West and East African producers export raw seed rather than crush locally.

- **Packaging bottlenecks** — high packaging costs, often sourced outside the continent, create "just-in-time delivery" challenges that inflate trade costs. UNDP is backing green packaging initiatives for shea and edible oils in Chad and Ghana as a direct response.

- **Underinvestment vs. Asia's model** — Nigeria's palm sector illustrates the gap starkly: analysts argue the production deficit should be read as commercial opportunity rather than weakness, since the supply gap presents room for expansion if capital follows Malaysia's plantation-and-processing playbook.

- **Policy response underway** — Kenya has launched a national sunflower/soybean/oil-crop acceleration drive, partnering with KALRO to develop and distribute high-yielding seed varieties and strengthen local processing capacity, explicitly to cut import dependence.

- **Corporate proof points** — Nigeria's Presco Plc posted a record N178.6 billion pre-tax profit in FY2025 (+57.3% YoY), while Okomu Oil Palm delivered N87.3 billion (+63.6% YoY), with Okomu's Q1 2026 sales 93% domestic — evidence that formal, well-capitalised African oil palm processors are highly profitable even without export orientation.

## Global Export Potential and Buyers to Target

Global vegetable oil trade remains concentrated but volatile, creating openings for new entrants:

- Global sunflower oil production reached 20 million tonnes in 2025, a market valued at $20 billion in 2023-24 and projected to hit $30 billion by 2030, traded by over 128 countries — though Ukraine, Russia, and Argentina together control 60% of global exports. Rising Asian demand, led by India, and a 19% year-on-year price surge into early 2026 signal room for diversified African supply, particularly refined sunflower and blended oils.

- African producers are better positioned to target **regional buyers first**: Uganda, Tanzania, and Ethiopia already trade sunflower oil actively within East Africa, and Ivorian palm oil exporters supply Mali and Burkina Faso as anchor markets.

- Beyond the region, **Gulf and South Asian import houses** (UAE, Saudi Arabia trading hubs) and **specialty/organic buyers in the EU** represent premium channels for shea, groundnut, and cold-pressed sunflower oil — categories where African origin and traceability carry a story premium that bulk palm/soy cannot match.

What Agribusinesses Should Take From This

1. Processing, not planting, is the bottleneck. Africa is not short of oil-bearing land or crop diversity; it is short of crushing, refining, and packaging capacity close to the farmgate.

2. Domestic-first is defensible. Okomu's 93% domestic sales base shows a large, protected home market can be more profitable than chasing export volume — build local brand and distribution before scaling export.

3. Regional trade corridors beat single-country plays.AfCFTA-enabled corridors (Ethiopia–Kenya, Côte d'Ivoire–Mali/Burkina Faso) show that neighbouring, tariff-light markets absorb surplus faster than distant export destinations.

4. Packaging and cold-chain investment pay for themselves.** Import substitution in oils fails without matching investment in bottling, labelling, and logistics — the "last mile" that keeps value onshore.

5. Policy tailwinds are real but early. Kenya's oilseed drive and Côte d'Ivoire's $440 million plantation plan show governments are now backing processing — agribusinesses that align with these programmes can access seed, extension, and blended finance support.

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Africa Brew Brief | RIC Brands — RIC Brands' intelligence platform tracking African agribusiness, commodity trade, and origin stories — reporting the ground truth that shapes better decisions for African agriculture, trade, and investment. Published for buyers, investors, policymakers, and the people building Africa's food future. Follow the brief: https://share.google/vnz8ZqMf6ujiKPr4j | wilbert@ricbrands.com