Boost for cashew, oil palm processing as SECO commits $10.5m towards 20% value addition

The Switzerland government, through the Swiss State Secretariat for Economic Affairs (SECO), has announced a US$10.5 million grant for the cashew and oil palm sectors.

The investment, which is under a five-year project dubbed the Second Phase of the Ghana Private Sector Competitiveness Programme (GPSCP II), aims to achieve 20 percent domestic processing of cashew and oil palm over the project’s duration, in addition to comprehensive regulatory and value chain harmonisation and capacity building.

The GPSCP II is a bilateral initiative between the Swiss State Secretariat for Economic Affairs (SECO) and Ghana. It is jointly implemented by NIRAS International and Proforest, under the auspices of the Tree Crop Development Authority (TCDA).

Overall, GPSCP II aims to enhance trade and competitiveness in the cashew and oil palm value chains, addressing the challenges faced by these sectors and driving sustainable growth.

The project is designed to be implemented under three main modalities – strategic cooperation partnership, rapid response mechanism and development partnership with the private sector.

Team Leader, GPSCP II, Ato Simpson, highlighted that this second phase seeks to build the capacity of private sector actors in the production value chain by supporting them with marching grants to become more competitive and productive.

He explained that the initial research carried out in phase one shows that small businesses producing cashew and oil palm are bedeviled with many challenges including lack of modern technology, lack of access to credit and market, hence the introduction of the funding initiative to support their growth.

Similarly, a percentage of the fund, US$1.5 million, is allocated to the public sector – ministries, government agencies and regulatory bodies – to assist them in developing policies and setting standards that will help boost domestic processing and consumption.

“Processors under the project can access a matching grant to the value of GH₵3 million to invest in technology, access consultancy services, access to markets and build capacity of staff, among others,” he said.

The Chief Executive of Tree Crop Development Authority (TCDA), William Agyapong Quaittoo, expressed heartfelt gratitude to SECO and all the implementing partners, highlighting the huge potential of the tree crop sector.

“There is a need to invest in the value chain and focus on research and development to come out with high-value seedlings that will increase yield. Vertical expansion is the way to go rather than horizontal and this means more investment in research,” he added.

Local processing capacity

Ghana is among the top cashews producers in West Africa, with about 350,000 metric tonnes of raw cashew nut (RCN) exports. However, local processing and consumption remain low at about five percent on average, a situation the project seeks to change.

The cashew and oil palm production value chains have about 3,000 processor groups and about 30 companies processing only cashews.

Despite this, current local processing capacity is about five percent, with the TCDA hopeful that with the grant would not only help to regulate the shipment but control prices to ensure local processing is increased to about 20 percent by the end of the project period.

MoU with TCDA

Part of the initiative would be to support the TCDA to harmonise systems and regulatory bodies that existed before the coming into being of the TCDA in 2020.

Swiss Ambassador to Ghana, Simone Giger, underscored the strong bilateral relationship between her country and Ghana, which she says explains the investments the Swiss government continues to make in Ghana.

“We have signed an MoU with TCDA to facilitate access to resources from our fund to be able to now develop policies and standards and now develop the sector for the benefit of the nation.

“The project seeks to strengthen the Authority with its mandate of regulating the cashew and oil palm sectors and facilitating high-impact reform initiatives,” she said.

Executive Director of Cashew Council Ghana (CCG), Kofi Agyarko Mintah, on his part, welcomed the development, particularly efforts at promoting value addition and regulation of the tree crop sector.

He, however, highlighted the development and implementation of policies and standards as the main concerns facing the sector.