Palm Oil – a major economic and social opportunity for Ghana

The traditional West African diet does not include large amounts of dairy products. Instead, essential fats are obtained from vegetable oils and in particular oil palm, which is a staple component of the local cuisine. It is mainly used in an unrefined form as an ingredient in local dishes and also as a soup. Domestic demand for palm oil is strong throughout West Africa and increasing, but production has not kept pace with demand, resulting in more expensive imports being used to fill the supply gap.

Undoubtedly Ghana has the potential to not only meet its own domestic demand, but also to become a substantial exporter in the future. This potential was recognised by government who in 2003 implemented the President’s Special Initiative in Oil Palm (PSI-Oil). This programme was launched to help smallholders to become more productive and generate greater returns. The Government distributed more than 3 million hybrid seedlings throughout the country which is equivalent to 20,000 hectares of palm oil plantation. The initiative encouraged smallholders to adopt improved planting and husbandry technologies, to commercialise their production and to link them to modern processing mills.

Volta Region

Despite this programme palm oil cultivation is very low in , until now the Volta Region due to the absence of a commercial oil palm mill. Volta Red addressed this problem by opening its new oil palm processing mill in May 2013.

The Nkwanta South and Kadjebi districts of Volta Region where our activities are centred are some of the more remote and economically disadvantaged in Ghana. Over 80% of the economically active population are employed in agriculture, most on a subsistence basis. There is no major industrial activity located in the region and unemployment levels are high and most of the youth migrate to Accra in search of jobs.

Volta Red’s developments have brought significant economic benefits to this economically challenged part of Ghana. Volta Red is the largest employer in the region, which has historically lacked formal employment opportunities.  Our wages are among the industry’s highest in the whole country while the company has 400 employees, nearly half of whom are female.

The World Bank notes that ...

... large palm oil plantations generate up to 30 times more employment per unit area than other large scale farming, such as soya beans, and it is estimated that a 1% increase in hectares of palm oil production contributes to a reduction of between 0.15% and 0.25% of those in poverty at a district level. Therefore, the project is expected to have a substantial positive economic impact on local employees and outgrowers.