with industry players warning that the practice is undermining local production, reducing farmers’ incomes and depriving government of significant tax revenue.
The Oil Palm Development Association of Ghana (OPDAG) estimates that Ghana loses about GH¢50million every month to the smuggling of oil palm products, highlighting the growing economic cost of illicit trade.
OPDAG president Dr. Paul Kwabena Amaning, at the Development Bank Ghana (DBG) oil palm stakeholder engagement, said the problem has become increasingly severe in recent years, making it difficult for local farmers and processors to sell their produce.
According to him, large volumes of illicit oil palm products are entering the Ghanaian market through unapproved channels and creating unfair competition for local producers.
The association has also estimated that about 6,000 tonnes of finished edible oil are smuggled into Ghana every month, further weakening demand for locally produced and processed palm oil.
The development comes at a time when government is seeking to expand the oil palm industry as part of efforts to promote agro-processing, create jobs and reduce Ghana’s dependence on imported vegetable oils.
Local industry under pressure
Data from the Tree Crops Development Authority (TCDA) show the domestic market’s scale and the opportunity available to local producers.
Ghana consumes approximately 450,000 tonnes of palm oil annually while domestic production is estimated at about 300,000 tonnes, leaving a supply gap of around 150,000 tonnes that must be met through imports.
This gap has however created an avenue for illicit operators to introduce cheaper and unregulated products into the market.
OPDAG has warned that smuggled products compete directly with locally produced oils, making it harder for farmers and processors to obtain remunerative prices for their output.
Regulatory response
The TCDA has responded by intensifying collaboration with other state agencies to tackle illicit imports.
The authority recently engaged key institutional and regulatory stakeholders to establish a joint monitoring and enforcement taskforce to combat the illicit importation of refined palm oil and other vegetable oils.
The taskforce is expected to monitor businesses involved in the cooking-oil trade, inspect products and verify the registration and licencing status of operators.
TCDA Chief Executive Officer Dr. Andy Osei Okrah said the authority cannot effectively regulate the sector alone and therefore needs stronger cooperation among the relevant state institutions.
He said the objective is to ensure compliance with regulations while protecting the domestic oil palm industry from unfair trade practices.
Production expansion
The smuggling challenge comes as Ghana seeks to substantially increase oil palm production.
Under government’s Feed Ghana Programme, the targetted oil palm area is expected to increase from about 350,000 hectares in 2024 to 375,000 hectares for 2026, while production is projected as rising from 2.1 million tonnes to three million tonnes. The programme also targets crude palm oil production of 448,000 tonnes in 2026.
These figures indicate the potential for oil palm to become a more significant contributor in Ghana’s agricultural and industrial transformation.
However, industry players argue that increased production will only translate into stronger incomes and investment if local producers are protected from unfair competition.
Dr. Okrah has also identified illicit vegetable-oil imports, quality assurance and regulatory enforcement as among key challenges confronting the sector.
He said government is working on a comprehensive national oil palm policy aimed at improving productivity, competitiveness and value addition.
Source : Business and Financial Times
