CAG Warns 20% Fruit Juice Tax Could Cost Ghana $1.7bn
By Praisebell Rosemond Larbi
The Chamber of Agribusiness Ghana (CAG) has raised serious concerns over the 20% excise duty on natural fruit juices, warning that the tax could cost the country up to $1.7 billion in annual export earnings and put more than 120,000 jobs at risk if it is not urgently reviewed and addressed.
In a statement released on Monday, December 15, the Chamber highlighted that the excise duty has significantly increased production costs for local manufacturers, making Ghana’s locally processed fruit juices less competitive in both domestic and international markets. This has discouraged investment in the agro-processing sector and limited the country’s potential to expand its share in the global fruit juice market.
CAG emphasised that global demand for natural fruit juices is rising, presenting Ghana with a critical opportunity to grow exports to markets across Africa, Europe, the Middle East, and North America. Despite the country’s abundant supply of tropical fruits and the capacity to produce high-quality juices, the current tax regime is undermining Ghana’s ability to capitalize on these opportunities.
The Chamber noted that the excise duty has forced some local factories to scale down production, while others have been compelled to abandon export plans altogether, affecting the livelihoods of thousands of workers across the value chain. Beyond the processing plants, the tax impacts farmers, transporters, distributors, and other stakeholders, particularly youth and women, who form the backbone of the agro-processing and supply chain industries.
CAG also warned that the tax is counterproductive to Ghana’s import substitution goals, as it encourages the influx of cheaper imported concentrates and finished beverages. This not only erodes the competitiveness of local products but also leads to foreign exchange losses estimated at between $350 million and $450 million annually, further straining the economy.
The Chamber called on the government to scrap or significantly revise the 20% excise duty, stressing that a more supportive policy environment is essential for boosting domestic production, increasing exports, and creating jobs. CAG also signaled its readiness to work closely with authorities to strengthen the agro-processing sector, enhance value addition, and ensure that Ghanaian products can compete effectively on the international stage.
According to CAG, taking urgent action on the tax is critical not only to safeguard existing jobs but also to unlock new investment opportunities, expand the market for local fruit juices, and support the broader goals of economic growth, industrialization, and youth employment. The Chamber’s warning underscores the delicate balance between government revenue measures and sustainable sector development, highlighting the need for policies that promote competitiveness without stifling industrial growth.
With its combined focus on employment, foreign exchange earnings, and value addition, CAG urges the government to reconsider the excise duty and adopt a framework that allows the sector to thrive while contributing meaningfully to Ghana’s economic development.
