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Oil palm producers call for positive discrimination against bench mark value on oil imports

botchway August 21, 2019

 

By Maxwell Ofori

Oil Palm Development Association of Ghana (OPDAG) wants government to exempt vegetable oil from the 50% reduction on the import benchmark values with immediate effect.

The Association says the impact of the new policy is adversely affecting the local palm oil industry.

According to them, there is an estimated three million dollars loss of revenue per month to the state.

The Association also claims that, the policy has legitimised under invoicing, hence flooding of the Ghanaian markets with cheaper and substandard vegetable oils.

“Estimates of the undeclared importation (not conforming to regulatory standard) stands at approximate 6,000 to 7,000 metric tonnes per month and a loss in revenue through tax evasion stands at an estimated three million dollars per month (up by 400% compared to 2008),” the group asserted.

The Association made the complaint when they paid a courtesy call on President Akufo-Addo at Jubilee House yesterday.

Outlining their difficulties, Samuel Avaala, who spoke on behalf of the Association, said the refineries are unable to sell their products competitively against imported vegetable oil which has become cheaper as a result of the policy.

He cited an example of a 25 litre vegetable oil produced locally and sold on the market for GH¢140 – inclusive of duty, levies, Value Added Tax and logistics.

But imported vegetable oil products are sold on the market at the cost of GH¢113.

As a result of the policy, Mr Samuel Avaala further indicated that the sector is experiencing jobs and income losses, especially in the rural areas where local mills and smallholder farmers are actively engaged in the oil palm value chain.

He believed that the policy of planting for export and rural development will be in danger of not achieving its desired objectives.

The Association also called for support from the government.

Among other things, the Association expects “that vegetable oils should be exempted from the 50% reduction on import benchmark values immediately and that the importation of vegetable oil should be restricted to the Tema and Takoradi ports only.”

Government, since Thursday, April 4, 2019, reduced the benchmark value of import duties at all of the country’s ports.

At an Economic Management Team town hall meeting, Vice President Dr. Mahamudu Bawumia, disclosed the benchmark value of import duties will be slashed by 50 per cent while importers of vehicles will enjoy 30 per cent.

President Akufo Addo, in his response to the cry of the Association, observed that a country like Malaysia picked the oil Palm business from Ghana and has developed it into a “16 billion dollar industry per year”.

Ghana on the hand, the president said, “is facing serious challenges at her attempts to develop the sector”. 

“The issues that you have brought here are very important issues for us in Ghana and they are matters which we have to address.

“I want you to have a clear understanding that the overall posturing of my government is to be very sympathetic to your development.

“I think it will make a lot of sense for Ghana if we could find a consensus and a meeting of minds on how to address the challenges that are bothering you because ultimately we will be the big gainers of it,” President Akufo Addo noted.

The Minister for Agriculture, Dr Akoto Afriyie assured the association that under the leadership of the President, government will consider their request for a review of the 50% Tarriff Reduction regime on Oil Palm importation.

A Deputy Minister for Trade and Industry, Mr Ahomka Lindsay, on his part noted that some members of the Association have already received stimulus packages. However, the Trade Ministry will give attention to the latest request for support by the association and meet them at their point of need.

The OPDAG is a non-Governmental association with the objective of promoting socially responsible, ecologically and economically sustainable production, value addition and trading of oil palm and oil palm related products in Ghana.

OPDAG represents the interests of the whole oil palm value chain from the soil to homes, which covers the interests of thousands of smallholders, out-grower farmers, nucleus estate plantations, millers, local refiners, manufacturers of soaps and other consumer goods.

A recent consolidated statistics by the World Bank show that the whole palm oil sector employs about 3.5 million people across ECOWAS and benefits indirectly more than 30 million Africans. These facts and figures reveal the existence of a huge development opportunity for the oil palm value chain in Ghana and Africa.

In Ghana the oil palm value chain directly employs approximately 300,000 people and indirectly more than 2.45 million people.

 

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