Ghana is one of the top producers of Shea butter in the world. Of the global production volumes of shea butter, 90% is used as edible ingredients in chocolate, candy coatings and other confectionery. The remaining 10% is used as a base product in cosmetic brands, mainly in skin-care and hair-care products like face and body moisturizing creams, hair creams, shaving and after-shave creams, baby care products and anti-aging products.
Naturally, one would expect a country that is uniquely positioned as one of the top producers of shea butter to be able turn the raw material into finished goods to service its citizens’ demand for Beauty and Cosmetic products but that isn’t the case.
According to Konfidants, a research advisory firm, “almost 70% of the Beauty and Cosmetics brands in the leading supermarkets in Ghana are imported.” Though this is a drastic improvement from over 90% in 2019, the nation has a long way to go if it is serious about industrializing its shea butter potential to generate enough internally generated revenue to service its 28.3 GHS billion-dollar interest on its debt this year.
Thankfully, all hope is not lost. The global beauty industry is estimated at $670 billion while the Natural and Organic beauty market is projected to reach $22 billion by 2024. Ghana has two choices; continue to supply raw shea butter for $70 million annually or help her entrepreneurs turn these materials into finished goods to make billions from the industry. This fact is not lost on the government. In his first State of the Nation Address of his second term in office, President Nana Akufo-Addo revealed that Ghana was planning to “end its over-reliance on cocoa to develop other cash crops such as shea through the establishment of the Tree Crops Development Authority.” While this is welcome news, one cannot help but wonder what the government’s plans are to enhance the visibility and improve the competitiveness of local brands in the Beauty and Cosmetic sector like, Peini Naturals, TAMA, NAYA by Africa, Eya Naturals and Kaeme.
On Friday, May 12, 2020, the Caretaker Minister of Finance, Osei Kyei Mensah-Bonsu, updated the nation of the government’s strategy to rebuild the economy through the GHS 100 billion Ghana COVID-19 Alleviation and Revitalization of Enterprises Support (GhanaCARES “Obaatan pa”) Program.
According to the government, the GhanaCARES program will “seize the opportunities created by COVID-19 for socio-economic transformation.” Some of the many solutions the GhanaCARES will provide include; “making commercial farming attractive to the educated youth, developing the country’s light manufacturing sector, reviewing and optimizing the implementation of Government flagships and key programs and creating jobs for young people while expanding opportunities for the vulnerable in society.”
The young entrepreneurs in Ghana’s Beauty and Cosmetic industry have been implementing some of the targets GhanaCARES has outlined with very little governmental support, and succeeding.
Thankfully, all is not lost, Eyetsa Ocloo, the founder of The Shop Accra (a company that grants hundreds of local brands direct access to market), believes diversifying the economy through industrialization is achievable if government is willing to engage players in Ghana’s light manufacturing sector;
“There isn’t enough research being done by the government to understand what is happening on the ground. Nobody has come to ask me any questions. Of all the 300 and 400 people (entrepreneurs in manufacturing) that we work with, I do not think anybody has asked them questions…If you do not ask me questions about what I need, how would you be informed on how best to help?”
The government revealed its plans to spend over GHS 113 billion in the year 2021 even though it projects to make a revenue of GHS 72 billion. The over GHS 40 billion deficit will have to be raised by going out to beg for grants, loans or finding unique ways to diversify the nation’s economy. Developing the nation’s shea butter industry, helping local brands stay competitive, and substituting them for the 70% foreign brands that dominate our shelves could be a refreshing way to implement the GhanaCARES objective with little financial commitment and a lot of willpower on the side of government.
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The writer, Dziffa Akua Ametam, is a business journalist and co-host of Breakfast Daily on Citi TV.