Foreign traders face uncertainty in Ghana markets

pic 3By MASAHUDU KUNATEH in Accra, Ghana

ACCRA, (CAJ News) – A storm is brewing in Ghana where local traders have revived threats to eject traders from neighbouring Economic Community of West African States (ECOWAS) and other foreign nationals operating in the
country’s retail sector.

At the centre of the storm is the Ghana Investment Promotion Centre (GIPC) Act 2013, which the Ghana Union of Traders’ Association (GUTA) believes is being violated.

The Act enjoins all enterprises in the country with foreign participation are required to register with the GIPC, the state agency responsible for the encouragement and promotion of investments in the West African country.

The GIPC, which replaced the 15 year-old Act 478 to the current Act 8655, aims to, among other things, protect the Ghanaian entrepreneurs from unbridled and unfair competition by unscrupulous foreign businesses in the
country.

Under the new GIPC Act, the minimum capital required for retail business has moved from US$300 000 to $1 million, while foreign investors who participate in joint venture enterprises have to show a minimum capital of
$200 000 with wholly owned foreign enterprises showing a minimum capital of $500 000.

The President of GUTA, George Ofori, insisted plans to stop foreign entrepreneurs owning firms in the retail sector were justified.

“We will pursue this (ejection of foreign entrepreneurs) to its logical conclusion because as we speak now the GIPC Act actually prohibits foreigners in engaging in retail activities. It has not been amended as we speak,” said Ofori.

The frustration among the locals has been linked to the country’s waning economic fortunes characterized by reduced direct foreign investment, rising unemployment and a struggling local currency.

Last year, GUTA and the Ministry of Trade and Industry tried to eject all foreigners operating in Ghanaian market.

This led to the setting up of an inter agency task force established to enforce the GIPC law 865, which authorizes petty trading as the sole prerogative of Ghanaians.

Foreign nationals have continued operating despite such legislation.

To mystify matters, some workers employed in the foreign-owned establishments are opposed to such moves.

The union meanwhile has the backing of local entrepreneurs and informal traders.

Kwesi Asare, a mobile phones and accessories dealer at the Accra Business District accused some foreign traders of conniving with landlords to eject Ghanaian businesses and give the shops or office accommodation to the foreign traders, at a higher rental.

He further alleged some of the foreign companies were evading payment of taxes to the government much to the detriment of development projects in the country.

“Because of this and others I want the government to expel them”, Asare stated.

Abdul Karim, a local businessman, shared similar sentiments.

“The government must be bold and eject illegal foreign businesses who continue contravening the GIPC Act,” he said.

Meanwhile, some foreign traders told this publication that they were prepared to register their businesses with the GIPC.

AmekaChiboyuh, a dealer mobile phones at the Kwame Nkrumah Circle, said he and his colleagues going to register with the GIPC “very soon. “

Although, some foreign businesses have reservations over the new Act, which they said operations non-feasible, Director at the Research and Business Development at the GIPC, Augustine Otoo, maintained that it provided the flexibility to attract more companies into the country.

In Ghana, there was a decline in FDI in 2013, as it attracted US$3.61 billion.

In 2014, there was a slight decline. But it recorded US$3.57 billion in that year.

“We realised that there was a need to make the facilitation and promotion aspect of investment quite attractive, bearing in mind the competitiveness of FDI attraction worldwide and within the African context,” he stated.

A cross-section of workers interviews in Accra said they would “resist” the taskforce from ejecting their employers.

Kwame Amoah, who works for one of the foreign-owned shops located around the Kwame Nkrumah Circle, said if the foreign traders, mainly Nigerians, Nigeriens, Malians, Indians, Lebanese, Chines and Syrians, among others
were ejected, local workers would suffer economically.

“Through their businesses, we have secured employment. So, if anyone asks them to pack and go, our source of income will be cut and our livelihoods affected. We won’t sit back and allow the government, through pressure
from GUTA starve us,” said Amoah.

Similarly, Naa Adjeley, who collects wares from an Indian firm for resale, said the eviction of the foreign businesspeople would spell doom to her and two daughters.

“Because of the Indian company’s help, I am able to pay my young daughters’ school fees.

“I am prepared to protest against anybody who wants to eject foreign traders operating in the country’s retail sector,” Adjeley, a widow, said.

A struggling economy has been attributed to the frustrations among locals. The International Monetary Fund (IMF) was predicting the country’s economic growth would fall to as low as 3,5 percent this year.

In addition, the Ghana Statistical Service’s (GSS) first quarter GDP report for 2015, indicated the economy dropped from $48,6 billion in 2013 to $38,3 billion last year at market exchange rates.

– CAJ News

Pin It

Comments are closed.