The story of Ghana’s oil palm is one of a promise unfulfilled. Once a symbol of prosperity and self-reliance, the sector has gradually faded into neglect—overtaken by fragmented production, low yields, and chronic underinvestment.
Villages that once thrived on the palm oil trade now struggle to process the fruit efficiently, while imports fill supermarket shelves with refined products from Asia and other parts of the world.
Despite abundant fertile land, favourable rainfall, and a long tradition of cultivation, Ghana produces only a fraction of its potential, forcing the nation to import over 100,000 metric tons of crude palm oil annually (FAOSTAT, 2023) just to meet domestic demand.
This is not for lack of potential, but for lack of direction. Smallholders—the backbone of the industry—lack access to improved seedlings, finance, and modern milling technology. Many still rely on rudimentary presses, losing nearly half their oil to inefficiency.
Meanwhile, large-scale estates that once anchored the sector have declined, weakened by years of policy inconsistency and limited reinvestment.
Few people realise that it is almost impossible to go through a day without using a product derived from palm oil. From cooking oil, margarine, and cosmetics to detergents, pharmaceuticals, and even biofuels, palm oil has become an invisible yet indispensable part of modern life.
Ironically, the oil palm—native to this very region—was later exported from Ghana to Southeast Asia, where countries such as Malaysia and Indonesia transformed it into a multi-billion-dollar industry.
Today, they dominate the global palm oil trade, while Ghana, the originator, lingers at the margins of the industry it helped create.
Lost promise of a golden crop
Ghana currently has over 350,000 hectares of oil palm under cultivation, producing an estimated 240,000 tons of palm oil annually (MOFA, Tree Crops Strategy Paper, 2022).
Smallholders account for nearly 80 per cent of the fresh fruit bunches (FFB) produced, yet achieve yields of only 4–6 tons per hectare, compared with potential yields of 15–22 tons per hectare under optimal management.
Four key factors explain this persistent yield gap:
1. Ageing farms and low replanting rates: Many plantations are over 25 years old—beyond their productive life—but replanting is rare due to high establishment costs.
2. Limited input use and weak agronomy: Low adoption of improved varieties and best management practices (BMPs) continues to depress yields and overall sector productivity.
3. Weak extension services: Most farmers receive little or no technical guidance on best management practices.
4. Lack of long-term finance: Conventional credit facilities designed for short-term crop cycles do not suit the oil palm’s three-to-four-year gestation period.
Despite its enormous potential, Ghana’s oil palm sector remains undercapitalised and underperforming, limiting its contribution to job creation, import substitution and rural prosperity.
Finance
The biggest constraint facing oil palm farmers is not land or labour—it is finance. Most smallholders rely on informal savings groups, family resources, or sporadic support from processors. Commercial banks are hesitant to extend long-term credit due to the crop’s extended maturity period and price volatility.
Microfinance institutions, constrained by short-term deposits, lend at high interest rates unsuited to tree-crop investment. Without affordable capital, smallholders cannot replant, apply fertiliser, or adopt improved management practices—leading to declining yields and lost income opportunities.
Missed industrial opportunity
Oil palm is Ghana’s second most important tree crop after cocoa (Tree Crop Development Authority, 2023), supporting food processing, cosmetics, and emerging biofuel industries. It provides a vital source of rural income across the Western, Oti, Volta, Central, and Eastern regions.
However, despite its importance, the sector has not benefited from the same level of structured financing and institutional coordination as cocoa or cashew.
Initiatives such as the Presidential Special Initiative (PSI) on Oil Palm (2001–2008), the AFD-supported Outgrower Scheme, and the Oil Palm Master Plan Project raised awareness but lacked sustainable financing and long-term institutional ownership.
As a result, farmers and processors continue to operate in silos—without a unified framework to coordinate policy, finance, and technical support.
Role of TCDA
Establishing the Tree Crop Development Authority (TCDA) marks a pivotal opportunity to address this fragmentation. With a mandate to regulate and promote six priority tree crops—oil palm, cashew, coconut, rubber, mango, and shea—the TCDA is well-positioned to serve as the central coordinating and investment-facilitation body for Ghana’s tree-crop subsectors.
To revive the oil palm industry, the TCDA, in collaboration with the Oil Palm Development Association of Ghana (OPDAG), should strengthen five strategic functions:
1. Sector Coordination: Strengthen OPDAG—which I helped establish—to serve as the unified platform for processors, financiers, farmers, and partners under one strategic framework, with members paying dues to sustain its activities.
2. Investment Facilitation: To attract private capital, develop and standardise financing instruments—particularly blended finance models.
3. Certification and Market Regulation: Oversee sustainability certification and traceability systems to access premium regional and international markets.
4. Capital Mobilisation: Design a Tree Crop Investment Fund to leverage concessional finance, climate funds, and impact investment.
5. Data and Monitoring: In collaboration with partners such as GIRSAL, establish a digital farm registry and loan-performance dashboard to enhance planning, transparency, and investor confidence.
The writer is an Agribusiness Enthusiast.