Government urged to impose levies on cashew exports
The Ghana Export-Import Bank, has urged government to consider imposing export levies on some specific agricultural commodities such as cashew.
The Ghana EXIM Bank noted that the move will serve as a source of revenue for government as part of efforts to develop the agricultural sector.
According to the Manager in Charge of Export trade at the Ghana EXIM Bank, Judith Aikins, the move will also protect domestic industries.
She said this while speaking on the sidelines of a stakeholder forum on export trade organised by the Ghana Export-Import Bank.
“We are asking the government to impose the export levies. They should come up with policy reforms in [the form of] export levies. For example, our neighbouring French countries have export levies such that they are not able to export cashew from their country, so they can’t pay because of the levies imposed on them.
“So, Ghana should do the same. And it’s notable to note that Ivory Coast made close to about 134 million USD in 2019 in that regard. So, these are revenues that Ghana can benefit from. These are extra revenues we can earn as a country, if our neighbouring countries are doing that we can do that as well,” she said.
Ghana which is among Africa’s major producers of cashew nuts, currently produces around 85,000 metric tonnes of raw cashew nuts each year.
This accounts for about one percent of the worlds’ total production.
Cashew production in Ghana dates back to the 1960s, with production for export markets expanding in the last decade.
Despite this, the cashew sector faces a number of challenges that hamper local processing of the commodity in the country.
Such challenges include the lack of capital to maintain operations, alongside the inability of local processors to access raw cashew nuts from farmers.
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Also, local processors face strong competition from foreign processors and exporters.
These conditions leave Ghana off the field, thereby missing out on major opportunities for jobs and revenue generation.
Recent studies show that governments in key cashew producing countries across Africa are increasingly introducing strategies to increase both the production and processing of raw cashew nuts.
These include granting local processors preferential access to raw cashew nuts. It also includes imposing export duties on raw cashew nuts.
Revenue from this tax is then used to subsidise and support local processors.
Meanwhile, for the first time since the 1970s, Africa’s share of the European cashew kernel market reached double digits in the 2021 cashew season.
Africa’s share of the market increased to 11% in 2021, making it the second-largest exporter of cashew kernels into Europe behind Vietnam.
Despite being the world’s largest producer of raw cashew nuts (RCNs), Africa’s share of the kernel market has remained within a single-digit percentage due to the low rate of local processing in the continent, which remains less than 10%.
Data available to the African Cashew Alliance (ACA), however, shows that from an export range of between 110,000 and 120,000 tons in 2020, Africa’s cashew kernels export into Europe increased to between 140,000 to 170,000 tons, representing 11% of the EU kernel market, in 2021.
Vietnam, the highest cashew processor in the world, had the greatest share of the EU kernel market, with 77% of the market share. Indian exports accounted for 7% of the kernel market in Europe, Brazil held 2% of the market share while Indonesia and other smaller cashew processing countries had a 1% share of the market, respectively.
Africa’s share of the United States cashew kernel market remained single digit, with only 5% of cashew kernel imported into the US coming from Africa. Vietnam dominated the US cashew kernel market as well with 89% shares while 3% of kernels in the US were imported from Brazil.
Though Africa’s share of the major cashew markets remained low despite the continent producing almost 60% of global cashew in 2021, a cashew expert and consultant with the ACA, Jim Fitzpatrick, who presented these statistics at the maiden section of the ACA’s Global Market Encounter (GME) in 2022 held virtually on Wednesday, March 2, believes an 11% share of Europe’s market is progress and will improve with time.
He highlighted that the increase in the market share is a result of an increase in local cashew processing in Africa, though still very low.
