The Oil Palm Development Association of Ghana (OPDAG) has expressed deep concern over the growing incidence of smuggling of oil palm products into the country. Despite numerous complaints to designated authorities, President of OPDAG, Samuel Avaala, disclosed that smugglers are utilizing unapproved routes and exploiting the ECOWAS Trade Liberalisation Scheme to intensify their activities.
Mr. Avaala lamented that a policy designed by the president last year to combat oil palm smuggling has not been effectively enforced. The Association estimates that the economy loses approximately US$40 million annually due to the smuggling of finished oil palm products from Togo through various entry points in the Upper East and West Regions.
Smuggled products entering the market are priced lower, evading all taxes and duties, creating an unfair trading field that disproportionately benefits the smugglers while adversely affecting local manufacturers.
Highlighting the potential consequences, Mr. Avaala emphasized that without urgent action by authorities, numerous jobs, including those of out-grower farmers, are at risk as local producers may be forced to reduce operations or shut down.
Customs enforcement of the anti-smuggling policy, in collaboration with district security checkpoints across the country, was identified as a crucial measure to curb the ongoing smuggling activities.
Ghana ranks as the third-largest palm oil producer in West Africa, following Nigeria and Ivory Coast. The domestic consumption of refined palm oil is around 300,000 metric tonnes per annum, valued at GH¢1.3 billion. Current local production stands at approximately 120,000 metric tonnes, with imports at 150,000 metric tonnes per annum valued at US$271 million.
With local demand expected to rise, industry players are urging the government to support the sector to realize its full potential in contributing to the economy. The local oil palm industry directly employs about 50,000 people at the plantation level.
Apart from the smuggling challenge, the sector faces issues such as over 70 percent of production being in the hands of small-scale producers, and oil extraction and processing being largely carried out by small artisanal millers. The use of limited technology results in lower oil extraction rates and higher fiber content in waste.
OPDAG advocates for intensified efforts to increase production levels by at least 50 percent, emphasizing the need for the adoption of best practices at the farm and mill levels.