Under-invoicing of raw rubber exports must be curbed

The revelation of under-invoicing of export value of raw rubber, as highlighted in yesterday's edition of the Daily Graphic, is an issue of major concern, not just to the local rubber industry, but to the entirety of national development. 

The front page lead story revealed how under-invoicing of the value of raw rubber exports has been facilitating the repatriation of resources outside the economy.

Ultimately, this quiet operation is supposedly threatening the survival of local rubber processing factories and the attendant jobs for the youth and national resources in taxes.

The details include the fact that export Free On Board (FOB) prices were under-declared by nearly $50 million in 2024, and by more than $21.5 million in 2025.

These figures may not have been directly lost by the state, but the implications of the under-invoicing scheme cannot be lost on anyone.

The scheme facilitates the clandestine repatriation of resources from the country. 

Section 15 of the Foreign Exchange Act, 2006 (Act 723) requires exporters to repatriate the full export proceeds through a licensed bank to meet the obligation of the Letters of Commitment arrangement necessary for export.

It is actually based on meeting this requirement that exporters are given the green light to continue to export.

By under-invoicing the value of the export, the process under-declares how much is required to be repatriated back into the local economy. It means that the perpetrators continue to ship out high volumes of resources but return just a small fraction into the economy.

In some instances, raw rubber priced on the local market at above GH¢9 is only captured on official export documents as costing a meagre GH¢0.72.

An even bigger and more direct impact is felt in how the unrestrained export of raw rubber is denying local factories the essential raw material for processing.

That all companies in the local rubber processing value chain have scaled down operations since 2024 must be of concern to authorities. 

For a country challenged by youth unemployment, job creation deficits, and a general lack of entrepreneurial drive, the gradual decline in processing volumes at the rubber factories does not tell an encouraging story.

It paints a picture of national inertia, an indifferent attitude to a national crisis.

The local rubber processing factories, we are told, employ a combined workforce of more than 1,300, but have had to scale down to around 800 employees since the decline in raw materials for processing.

What it means is that the youth are losing their source of livelihood, while the companies shrink in capacity instead of expanding to accommodate more workers.

This contradicts the government's 24-Hour Economy policy, which places industrialisation as a catalyst for economic transformation.

The policy contains an initiative to produce raw materials to feed local industries to keep machines operating around the clock.

It is for this reason that an intervention has become critical to save the local industry in order to protect processing infrastructure, investments and jobs.

Ghana's rubber processing factories have a combined capacity of 171,460 tonnes per year, but the country produces just about 110,800 tonnes of rubber annually.

This leaves a deficit of about 60,660 tonnes to satisfy the demand from the local firms.

Yet, so much is exported without adding value. 

What is the true benefit of exporting raw rubber when local processing factories cannot have enough to process?

The challenges confronting the industry are too many to ignore.

It is an industry that can support the 24-Hour Economy initiative. 

The relevant state authorities must step in to save the local industry.

Like the cocoa sector and the gold industry, which have turned to value addition rather than raw exports, the rubber industry needs similar treatment to reap full benefits.

For, every ounce of raw rubber exported creates value in another economy and wipes out jobs in the local system.