Illicit importation of edible oil killing local industry value chain-OPDAG

The President of the Oil Palm Development Association of Ghana (OPDAG), Mr. Samuel Avaala, has made an unequivocal case for the country’s oil palm industry, insisting it has more than sufficient capacity in the refining and bottling/packing of crude palm oil to meet local demand.

As a result, he declared, that there is no basis for the continued importation of finished vegetable oil into the country especially so when the imports come in through unapproved routes thereby evading the taxes applicable to such imports and robbing the state of so much needed tax revenue.

Speaking on behalf of local producers, Mr. Avaala declared: “We have more than sufficient capacity to refine and bottle/package locally-produced vegetable oil for consumption and in so doing contribute to the sustenance and economic viability of smallholder farmers in particular and the entire value chain in general.”

He added that the impact of a vibrant local oil palm value chain on the economy is potentially huge and can and must be harnessed through rigorous enforcement of tax laws and a proactive approach to curbing illegal imports in the immediate term. He called for the immediate passage of the oil palm development authority bill which will help in regulating the industry, and in the medium to long term promote the growth of the production of sufficient palm fruits to make the country not only self-sufficient but also a net exporter of palm oil products into the sub region.

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He bemoaned that currently the industry is faced with the influx of illegal importation of vegetable oil on the market which if not checked could stifle local production and gradually kill the local industry.

He said investigations has revealed that an average of about 6,000 tonnes of finished edible oil are imported every month into the country which sells at unbelievable prices which are below not only the landing International CIF Tema prices but lower than even local producers.

This form of damping has been attributed to Duty/Tax Evasion and Tax avoidance in the form of under-declaration, under-invoicing, mis-declaration, smuggling, removal in-bond, removal in transit and corruption at entry points making Government lose huge sums of money “close to US $3.0 Million/Month” he revealed.

This development, he observed, is very disturbing and anti-Ghanaian “because the continuous importation of edible oil will adversely impact the annual financial contributions local producers make to the state.

Even more worrisome is the fact that imported finished vegetable oil has insignificant added values in terms of industrial competence, direct investment, the use of local raw materials and employment for over 290,000 people across the value chain.

Mr. Avaala stressed that the country’s Palm Oil industry has the capacity to meet the local demand explaining that the existing crude palm refineries in Ghana have a combined capacity of approximately 615,000 m tonnes per annum against requirement of Ghana 300,000 per Annum.

“A clear indication that the local manufacturing companies have even twice the ability to cater for local demand and also some ECOWAS markets through exports. This can contribute to the foreign exchange earnings of the country.

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He therefore called on Government, policy makers and the enforcement/implementing agencies to as a matter of urgency take the necessary steps to stop the menace of illicit importation of vegetable cooking oil into Ghana.

Adding his voice, Mr. Maxwell Commey, the Public Relation Officer of OPDAG observed even more alarming is the fact that the quality of imported finished oil is questionable since the unapproved routes they pass through means regulatory authorities such as the Food and drugs Authority (FDA) and the Standards Board will not have access to do their checks to ascertain whether the oil is good for consumption.

“We appeal to key stakeholders including: Ministry of Finance, Ministry of Trade & Industry and Ministry Food & Agriculture, the General Agricultural Workers Union (GAWU) and the Association of Ghana Industries (AGI) to do every legitimate thing within their respective mandates not only to save the local palm oil industry/value chain but more importantly to create the enabling environment for it to grow and to prosper.

The Oil Palm Development Association of Ghana is a business registered under the laws of Ghana and formed under the umbrella of oil palm farmers, millers, refiners and end users.

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