Michael Okyere Baafi
The Ranking Member on Parliament’s Trade, Industry and Tourism Committee, Michael Okyere Baafi, has called for urgent and decisive government action to protect the country’s rubber processing industry, warning that the continued export of raw rubber is crippling local factories, destroying jobs and undermining value addition.
Addressing a press briefing after the Committee made a statement on the floor of Parliament, the New Juaben South MP said Ghanaian rubber processors have for years struggled to secure raw materials, forcing many to scale down operations despite having the capacity and capital to produce.
He said the industry had long appealed to successive governments to either suspend or ban the export of raw rubber to ensure local factories had adequate supply, but those calls yielded little progress until the recent Budget Statement.
According to him, the Finance Minister’s declaration that raw rubber exports should no longer be permitted was a welcome intervention that must now be firmly enforced.
Mr. Okyere Baafi explained that the nation’s rubber processing sector, made up of about five or six major companies, including Ghana Rubber Estates and others, is currently operating far below capacity due to acute shortages of raw rubber.
He revealed that some companies have lost lucrative international contracts with major tyre manufacturers as a result.
“Ghana Rubber Estates, for instance, now deals only with Michelin, and even that contract has been reduced. They have also lost their contract with Pirelli, one of the world’s biggest tyre manufacturers,” he said, describing the situation as deeply troubling for the country’s industrial ambitions.
He noted that these challenges prompted the Trade, Industry and Tourism Committee to visit rubber factories last week to assess conditions on the ground.
The visit, he said, confirmed that factories were not shutting down due to lack of machinery or capital, but simply because they could not access rubber to process.
Mr. Okyere Baafi blamed the situation largely on the Tree Crop Development Authority (TCDA), accusing it of failing in its regulatory mandate.
He said instead of supporting local processors, the Authority has sided with exporters who purchase rubber at the farm gate and ship it abroad in raw form, to the detriment of factories established in the country.
As a result, he said, employment in the sector has plummeted. Ghana Rubber Estates alone, he noted, has reduced its workforce from over 4,600 to about 3,000 workers, with some operating on shifts or temporarily shutting down sections of their plants.
Industry-wide, he said, employment has fallen to fewer than 6,000 workers, far below its potential of nearly 20,000.
“This directly affects jobs, tax revenue and the overall economy,” he stressed, adding that companies cannot pay more taxes if they are unable to produce at full capacity.
The MP also raised concerns about unfair practices involving foreign buyers who, through local agents, offer higher prices to farmers at harvest time, breaching existing contractual arrangements with processors who had guaranteed loans for out growers to establish their farms.
He questioned why businesses that invest locally, guarantee farmer financing and create jobs should be disadvantaged in favour of exporters whose operations are difficult to trace and add no value to Ghana’s economy.
Mr. Okyere Baafi therefore called on the Ministers of Finance, Agriculture and Trade to jointly summon the Chief Executive Officer of the Tree Crop Development Authority and issue clear directives to prioritise and protect Ghanaian processors.
“The Authority must support local industry, not become a thorn in the flesh of Ghanaian processors,” he said, insisting that banning raw rubber exports is firmly in the national interest.
By Ernest Kofi Adu, Parliament House