FABAG urges Ghana government to review sugar classification as costs rise for manufacturers
FABAG warns Ghana’s sugar classification policy is driving up production costs and prices, urging reforms to support manufacturers and strengthen industrial competitiveness.
GHANA – The Food and Beverages Association of Ghana (FABAG) has called on the government to review its classification of sugar as a “dual-purpose” product, warning that the policy is increasing production costs for local manufacturers.
Under current regulations, sugar is treated both as a finished consumer product and as a raw material for industrial use. FABAG said this approach subjects industrial sugar to the same taxes and levies applied to retail sugar, raising costs for businesses that rely on it as a key input.
FABAG General Secretary Samuel Aggrey said the classification does not account for differences in usage or volume, resulting in higher expenses across the manufacturing sector.
“The classification has led to higher expenses for manufacturers, as tax structures do not differentiate based on usage or volume,” he said.
The association noted that these additional costs are often passed on to consumers, potentially affecting the competitiveness of locally produced goods compared to cheaper imports. It added that the uniform tax structure fails to reflect sugar’s role as a critical raw material in food and beverage production.
FABAG further stated that the Ghana Revenue Authority already has systems in place to monitor the use of sugar in manufacturing, making the dual classification unnecessary.
The association has urged the Ministries of Trade and Industry and Finance to consider classifying sugar solely as a raw material for licensed manufacturers. According to FABAG, such a move would help reduce production costs, improve supply chains and support Ghana’s industrial growth agenda.
The concerns come shortly after the government introduced new measures banning the land transit of imported sugar and several other goods, including rice, cooking oil, frozen foods, textiles and flour. Authorities said the policy is aimed at tightening border controls and preventing revenue losses.
FABAG noted that Ghana has experienced significant revenue leakages due to the abuse of the transit trade regime, where some traders declare goods as exports to neighbouring countries but divert them into the domestic market without paying the required duties.
The association also called for the expansion of the restrictions to cover additional product categories. It specifically urged authorities to include fruit juices, warning that traders could misclassify goods to bypass the new controls.
FABAG said the government’s actions reflect a commitment to strengthening trade regulation, safeguarding public revenue and promoting a fair trading environment for legitimate businesses.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
