Ghana’s oil palm export industry has suffered a staggering 50% decline in 2024, marking one of the sector’s steepest downturns in recent years. The Oil Palm Development Association of Ghana (OPDAG) attributes this sharp drop to a lack of government support, an influx of cheap foreign oil palm imports, and structural inefficiencies plaguing the industry
As the new government takes office, industry stakeholders are calling for urgent reforms to revitalize the sector, which has the potential to become a major export earner and driver of rural employment.
According to OPDAG President Samuel Avaala, the downturn is driven by lack of protection for local producers, making them uncompetitive against cheap imported oil palm, weak regulatory enforcement, allowing illegal foreign oil products to flood the market and macroeconomic instability, with fluctuating exchange rates and liquidity issues hampering investments.
“We want to develop the sector ourselves, but right now, we’re not competitive compared to our neighbors,” Avaala told Joy Business news. “The market share for local producers has dropped below 50%, and that gap keeps widening.”
Ghana consumes approximately 450,000 metric tons of palm oil annually, primarily for products like vegetable cooking oil. However, local production meets only 300,000 metric tons, leaving a 150,000-metric-ton gap that must be filled through imports.
This reliance on imports not only exacerbates the trade deficit but also undermines efforts to develop a self-sufficient oil palm industry that could create jobs and boost rural economies.
As the new administration takes over, the spotlight is on how it will reverse this export decline and strengthen the oil palm sector. Key policy measures under consideration include stronger Import Regulations, implementing stricter controls to curb the influx of cheap, low-quality foreign palm oil, which has been undercutting local producers, incentives for local producers by introducing tax breaks, subsidies, and low-interest loans to support farmers and processors in expanding production capacity.
Also government can invest in value addition by encouraging the development of downstream industries such as palm oil refining and cosmetics manufacturing, which could boost exports and create jobs.
Another point is the exchange rate stabilization, through the establishment of policies to ensure currency stability, which would lower the cost of imported farming inputs and machinery.
Government can consider Public-Private Partnerships (PPPs), thus promoting collaborations between the government and private investors to expand oil palm plantations and modernize processing facilities.
To meet domestic demand and re-enter global markets competitively, Ghana will need to invest significantly in expanding plantations, particularly in underutilized arable lands, modernize production techniques to improve yields and reduce operational costs and strengthen farmer cooperatives to improve supply chain efficiency and market access.
The new government faces a critical choice that is implement bold reforms to rescue the oil palm sector or risk seeing it decline further, leading to increased imports, job losses, and missed economic opportunities.
