Ghana considers tax on raw cashew nut exports to curb smuggling

GHANA – Ghana is considering the introduction of a tax on raw cashew nut exports in a bid to address the ongoing issue of smuggling in the West African region.

William Quaittoo, Managing Director of the Tree Crops Development Authority (TCDA), announced this development during the 18th Annual Conference and Exhibition of the African Cashew Alliance (ACA) held in Cotonou from September 17 to 19.

“There are ongoing consultations and negotiations in Parliament to pass this bill this year,” Quaittoo said. “Currently, cashew exports are not subject to any tax. Some players transport cashews from other countries and export them through Ghana’s ports. This is a situation we want to put an end to.”

For over a decade, Ghana has been a hub for cashew nut smuggling in West Africa, with most nuts illegally sourced from Côte d’Ivoire, the world’s largest producer of the commodity.

Côte d’Ivoire has faced significant losses, with nearly 100,000 tonnes of cashew nuts smuggled out during the 2020 campaign alone. This illegal trade takes advantage of Ghana’s lower transit costs and lack of export levies at the port of Tema.

In response to this ongoing issue, Quaittoo emphasized that introducing a tax on raw cashew exports is part of broader efforts to ensure that local players have better access to raw materials.

This move is also expected to stimulate local processing industries and prevent further economic losses for neighboring countries.

Quaittoo pointed out that the tax proposal is just one of several measures the Ghanaian government is considering to strengthen the cashew sector. “In addition to the tax, there are plans to ban exporters from purchasing cashews directly from farms,” he said.

“We are also working to establish special groups to ensure that industrial players like Usibras, Ghana’s largest cashew processing company, can access the raw materials they need.”

Usibras has the capacity to process up to 35,000 tonnes of cashews annually, and the government’s efforts to increase local processing are aimed at boosting the country’s value-added production, rather than relying solely on raw nut exports.

The discussions at the ACA conference centered on how various policies across Africa could affect cashew processing on the continent. Experts acknowledged that while some progress has been made, more needs to be done to build a competitive and sustainable cashew processing industry.

During the opening session of the conference, Jim Fitzpatrick, a global cashew expert, highlighted that although installed processing capacities have grown, only 54% of Africa’s capacity is currently being utilized.

“When we look at the global landscape, 62% of Africa’s cashew processing capacity is concentrated in Côte d’Ivoire,” Fitzpatrick said. “The question now is: What kind of industry do we want to build in the long term?”

Alfred Francis, General Manager of Tanzania’s Cashew Council, emphasized the role of local processors in driving the industry forward.

“The objective of increasing domestic processing doesn’t rely solely on foreign investors,” Francis said. “In Tanzania, 60% of the 68,000 tonnes of processed cashews were handled by small local processors.”

While African nations continue to promote cashew processing, the debate remains on whether these policies will lead to long-term success.

As the ACA conference wrapped up, industry leaders were optimistic but called for bolder initiatives to ensure that Africa’s cashew processing industry can thrive independently and competitively on the global stage.

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