Palm Oil as they say is a Silent Goldmine. It was a lifesaver in the 80’s and has the potential to help rebuild the oil driven economy that has lost its steering. But how can this happen? This article explores the road map.

Historians believe that the use of palm plants as a food source dates back 5,000 years ago to West Africa. Oil palm trees grow in warm climates that have an abundance of rain and sunshine such as Nigeria, Malaysia and Indonesia. Palm plants produce two exportable commodities.

The pulp of the tree is crushed to form palm oil while the seed is crushed to form palm kernel oil. Palm oil has several applications including cooking, lubricants, candle-making, cosmetics, and can even be eaten prior to being crushed. It is cheaper to produce biofuel using palm oil making it a cost-efficient substitute to using soybeans or other crops.

Palm Oil is in abundance in Nigeria, specifically in Enugu, Imo, Ondo, Edo,, Ekiti, Cross River, Delta, Akwa-Ibom, Bayelsa, Anambra, Oyo, Abia and Ogun States, and these are considered to be the largest producers of palm oil. Palm tree plantations are spread over an area estimated to range from 1.65 million to 2.4 million hectares.

Palm oil industry is considered the industry that will revitalize the Nigerian economy and reduce its excess dependence on oil. Here is a statement from the Governor of Nigeria’s central bank Mr. Godwin Emefiele about palm oil, “in the 60s, Nigeria controlled 40 per cent share in the global palm oil chain’’. We were exporting our palm oil to different parts of the world, but because we found crude oil, we receded and abandoned it. The price of a ton of palm oil is more than the price of a barrel of crude oil. So, what happened?

“For other countries, when they had the opportunity in agriculture and in the crude sector, they did not let their guards down; unfortunately, we did and that is what we are paying for today. We will grow that market again and after that, we will go into cocoa,” he said. From his statement, the value of Palm oil on the Global market is greater than that of Crude oil (which is Nigeria’s main export)

Here is a detailed price comparison:

• As of January 27,2020, one barrel of crude oil today sold for about $53.14 which is N1,9263.25 (exchange rate N362.50 = $1).
• A barrel contains 159 liters. Which means crude oil sold for $0.334 per liter.
• As of January 24, 2020—Palm oil closed on January 24,2020 at $2,925.00 per ton which is N1,060,312.50 (exchange rate N362.50 = $1).
• A ton is 1,000 liters. Which means palm oil sold for $2.93 per liter on the international market.

So Where Do We Go from Here?

A liter of crude oil sells for $0.334 while a liter of palm oil sells for $2.93 (almost ten times the value of crude oil). Palm oil is easily produced locally and with the governments drive for more hands in the agricultural sector, this would be the best area to invest money, time and human resource into as it will yield more returns.

There’s this common saying among Nigerians that indicates that the easiest way to lose a friend is by lending him or her some money. This philosophy may sound logical but it is not true in all cases because there are friends that pay back whatever they borrowed without being reminded. However, there are people that take kind gestures from their friends and relatives for granted.

Anyway, the most difficult business transaction to carry out with friends isn’t lending them money, but getting them to pay you for works you did for them. Friends, most times, fail to realise that you are in business and that the work they wanted you to do for them is price-tagged. They take offence when you directly ask them to pay you and may feel you’re extorting them when you give them your discounted prices. Because of this, a lot of people are discouraged from carrying out any business transactions with their friends.

Kindly note that when I say “friends” here, I don’t mean business associates or acquaintances with whom you have no qualms handing out your charges. When I say “friends”, I mean those people that are very close to you and that you have developed a very good relationship with even though they are not family members. These are the people that we can call on when we need support, though they may not be able to help all the time.

The first thing a corporate employee tells an entrepreneur when it comes to transacting businesses with friends is to do it freely. But we know that is not always the best. I mean, you have to consider the inputs, such as time, energy and materials, that would have been used for other works to earn you some needed income. You also need to remember that you have bills to pay. So when you are told that you should do a free job for a friend, think of these factors before making a decision. Besides, your friends will keep coming back for more jobs, so will you do it free for them all the time?

Some entrepreneurs may advise you not to accept works from friends so that it doesn’t create problems for you. But this is also not advisable because it may create wider rifts between you and them. The thing there is that no matter how smart you try to play, your friends will definitely know you don’t want to work for them. Anyway, you know your friends more, so I guess you know how best to relate with them.

Disadvantages of Transacting Businesses with Friends

Though I advise against avoiding business dealings with friends, there’s still need to look into some of the disadvantages of working for them.

• They will want you to do the work at cheaper rates or for free but they will want better quality works within a short time frame. This will mount unnecessary pressure on you.
• They may be unsatisfied with the work you did for them. People usually expect much from their friends. In fact, they will expect perfect work from you.
• A little disagreement can cost you friendship. This is unlike your usual customers who may come back after minor disagreements.
• If you didn’t do the work up to their expectations, they will complain to everyone that knows you because they will see your mistakes as deliberate betrayal. This can cost you more prospective customers.

Advantages

In a situation where you did the work well and they are satisfied, you stand to gain the following:

• They will be your promoters for life. In fact they will passionately recommend you to people who might need your services.
• You can call in their favours later. Of course this is only possible if they believe that you did them a favour.
• You stand to obtain critical, unbiased and constructive feedback. To be honest, what other customers might not see, your friends will see them and point them out immediately. They will also sit on you until you readjust.
• You have friends for life. Some people may see this as nothing but it is important that we have people that look out for us at all times.

How to Transact Business with your Friends without Hassles

These suggestions are open-ended and therefore non-exhaustive. For that, I’ll suggest that you use your discretions to judge situations and make the right decisions. Well, below is how you can successfully get your friends to pay for whatever services you rendered to them and still make them grateful for your “help” and efforts.

Ask for More Time: Whenever friends ask me for help, especially in academic assignments, I always ask them to extend the time frame they gave me. To get them to do this, I’ll claim I have my own works to finish up, or that I have some backlogs to clear off. I can equally tell them I have an academic contract that will pay heavily and that I needed to finish that up on time. The thing here is that I have to sound busy even if I’m not. There’s a reason for this.

If I’d readily accepted the work, when I know the person isn’t going to pay or appreciate the time and effort I invested in it as well as the stress I passed through, I won’t be doing the person a favour, now would I? But when I sound reluctant, shift the deadline farther away and ask them to be patient, they will then plead that I leave other works and do theirs promising to “give me something” to cover up for whatever I lost within that period. If I do the work within the time frame they gave me, it will then be a favour, whether I’m paid or not.

But to be honest, this strategy works more in the case of those that won’t pay me. By moving the deadline farther, I can easily do the work without feeling any pressure because I will do them bit by bit and during my spare time.

Ask for their Contributions: This is not asking them to give you money to buy or get materials for the job. Here, you should ask them to provide the needed materials in kind. For instance, if you’re a tailor and your friend wants you to sew a particular style that will require fringes and special materials added here and there, you should ask him or her to buy those special materials and bring them along with the main cloth. This way, the cost of production and the stress involved in the job will reduce for you. If they offer to send you cash so that you do the purchases, accept that too. Now, when the job is done and they decide to pay you lower than normal, you won’t feel bad because the cost of production has been catered for beforehand.

Ask them about their Budget: Sometimes it is not logical to out rightly tell your friends your price, even if you discounted it, or to pretend you don’t want them to pay. You can jokingly tell them the services they asked for is expensive and wait for their reactions so you can take it from there. But the way I’ve seen it work better is by first asking them how much they budgeted for the purchases or services. If this is done before order is placed, it will be easier for you because you have indirectly told your friend that he/she will pay for the services/goods. This strategy will also help you to sell to your friend the type of goods he can afford. If you decide to offer them discounted prices, make sure they know that too.

Deal Indirectly with Them: This works best if you have employees that manage your business. In this case, you direct your friend to your office and allow him to transact directly with your employees, who will insist that he makes all the payments needed before the job is done. However, it will be your responsibility to supervise the job and ensure that it is well done.

Another thing that causes problems is getting your friends that bought on credit to pay up. Well, the only thing I can say here is that you should find a way to get them to pay upfront first; whatever that comes after that is your profit.