End raw rubber exports

By Michael Kofi Fosu

For more than a decade, a quiet crisis has unfolded in Ghana’s Western and Central regions. While thousands of hectares of rubber trees are tapped, local processing factories — including the large Ghana Rubber Estates Limited (GREL) — have struggled to operate at full capacity.

The primary cause is the widespread export of unprocessed rubber known as cup lumps (coagulated raw latex).

In 2025 alone, local factories operated at less than 40 per cent capacity because nearly half of Ghana’s raw rubber production was exported in its unprocessed form. In response, the 2026 Budget introduced theFeed the Industry Programme, a decisive policy designed to restrict raw rubber exports and prioritise domestic value addition.

The economic case

The economic rationale for restricting raw exports is compelling. According to the Rubber Processors Association (RPA) of Ghana, the country loses roughlyUS$100 million annually due to limited value addition in the rubber sector.

Raw rubber cup lumps typically earn about US$600 per tonne on the international market. However, once processed locally into Technically Specified Rubber (TSR), the same tonne can fetch nearly US$1,500.

By processing Ghana’s annual production of more than 100,000 tonnes domestically, export revenue could potentially increase from about US$56 million to over US$180 million.

Beyond exporting TSR, the next stage of industrial development would involve supplying local manufacturers producing vehicle tyres, surgical gloves and industrial bushings. This would significantly reduce Ghana’s import bill while strengthening domestic industry.

Protecting banking investments

The stability of the rubber sector is closely linked to Ghana’s banking industry, particularly the Agricultural Development Bank (ADB) and the National Investment Bank (NIB).

Through the Rubber Outgrower Plantation Project (ROPP), these banks have extended more thanGH¢650 million in loans to smallholder farmers. The project operates under a tripartite model in which farmers sell their produce to designated processors, who deduct loan repayments directly from the proceeds.

However, the emergence of “side-buyers” who purchase raw cup lumps for export using quick cash has disrupted this repayment system.

Restricting raw exports would therefore help:

• Protect loan recoveryfor banks with significant exposure to the sector
• Safeguard financial stabilitywithin the rubber value chain
• Encourage further lending, as financial institutions gain confidence in the sector’s viability

Recovered funds could then be reinvested to support the next generation of rubber farmers.

Social and rural impact

Beyond the economic and financial considerations, the rubber industry plays a critical role in rural livelihoods.

The sector supports more than 70,000 jobs, and its decline has direct consequences for social stability in rubber-growing communities.

In 2025, reduced factory operations — including the scaling down of shifts from three to two — led to significant job losses. The new policy aims to restoreround-the-clock factory operations, securing thousands of industrial jobs.

Stakeholders have also observed a worrying trend: when rubber processing slows, unemployed youth in some communities turn to illegal mining, commonly known as galamsey, as an alternative livelihood.

A thriving rubber-processing sector provides a legal and sustainable alternative while supporting rural economic development.

The Tree Crops Development Authority (TCDA) has also introduced a monthly minimum producer price, such as the price announced for March 2026. This measure protects farmers from exploitation by middlemen and provides greater income stability for rural households.

The path forward

Ghana is not alone in pursuing this strategy. Côte d’Ivoire successfully implemented similar export restrictions and now generates more than US$2.1 billion annually from rubber exports.

With the Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL) supporting indigenous processors, the foundations for a stronger domestic rubber industry are already in place.

However, effective enforcement will be critical. Export control systems at the ports must be automated and strengthened to prevent illegal shipments and reduce the risk of corruption.

Ghana’s ambition is to increase national rubber production to 250,000 tonnes by 2035, positioning the sector as a major contributor to non-traditional exports and a key pillar of the country’s emerging 24-hour industrial economy.

Ending the export of raw rubber is therefore not simply a trade policy decision. It is a strategic step towards industrialisation, rural development and long-term economic resilience.

The writer is the CEO, ITFP

 

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