FABAG Raises Alarm Over Government’s “Dual-Purpose” Classification of Sugar, Says It Inflates Production Costs
The Food and Beverages Association of Ghana (FABAG) has strongly criticised the government’s classification of sugar as a “dual-purpose” product, warning that the policy is unnecessarily driving up production costs for local manufacturers and threatening the competitiveness of made-in-Ghana goods.
In a statement, FABAG argued that treating sugar as both a finished consumer good and an industrial raw material leads to the application of high taxes and levies meant for retail sugar on industrial-grade sugar used in manufacturing.
According to the General Secretary of FABAG, Samuel Aggrey, the current classification has resulted in significant cost increases for food and beverage companies that rely heavily on sugar as a key ingredient.
Key Concerns Raised
- Higher Tariffs: Manufacturers are subjected to tax structures that do not differentiate between retail and industrial use or account for the large volumes involved.
- Increased Consumer Prices: The additional costs are eventually passed on to consumers, making locally produced beverages, confectioneries, and other products more expensive than imported alternatives.
- Unnecessary Burden: FABAG believes the “dual-purpose” tag is redundant because the Ghana Revenue Authority (GRA) already has effective monitoring systems to track the end-use of sugar at manufacturing facilities.
“When sugar is brought to a manufacturing facility, the GRA has established protocols to monitor its end-use,” Mr. Aggrey noted. “There is no reason to maintain a classification that treats raw material like a retail luxury when the oversight is already in place.”
Call for Policy Review
The association is urging the Ministry of Trade and Industry and the Ministry of Finance to urgently review and reclassify sugar as a raw material for licensed manufacturers. This, they argue, would streamline the supply chain, lower production costs, and support the government’s broader industrialisation and “Made in Ghana” agenda.
FABAG emphasised that a clear, singular classification for industrial sugar would help local manufacturers remain competitive without compromising government revenue collection or tax compliance.
The issue has become a major concern for the food and beverage sector, which contributes significantly to employment and economic activity in Ghana.
The government is yet to respond to FABAG’s concerns and demands.
Source: Statement by the Food and Beverages Association of Ghana (FABAG), March 27, 2026
