Ghana and foreign retail traders

Such a move had been expected since warning issued last June by the Ghana Union of Traders Association (GUTA) that its members would take action because legislation to control foreigners engaged in businesses in alleged contravention of the Ghana Investment Promotion Centre (GIPC) had not been effective.   GUTA’s president, one Mr Ofori said at the […]

Such a move had been expected since warning issued last June by the Ghana Union of Traders Association (GUTA) that its members would take action because legislation to control foreigners engaged in businesses in alleged contravention of the Ghana Investment Promotion Centre (GIPC) had not been effective.   GUTA’s president, one Mr Ofori said at the time that the continuous depreciation of the Ghanaian currency, the cedi, was as a result of the large foreign influx in retail trade in the country.
Thus for the second time in a year, traders of non-Ghanaian origin, mostly Nigerians, have, in effect, been asked to leave the country for engaging in trading activities that are reserved for Ghanaians.
 The development indicates a convergence between the positions of both the government and traders of Ghana to expel all foreign competitors – including nationals of member ECOWAS states from its territory.
In 2013, the Ghanaian government introduced legislation restricting retail trade in the country to its nationals, and prescribes among other penalties, prosecution for violators. The Ghanaian authorities had listed 48 markets as being out-of-bounds to non-citizens, out of which 35 are located in the capital Accra alone, being the main location of retail business in the country. Other markets that are off limit to foreign traders include seven in Kumasi, two each in Bong Ahafo and Eastern Region, and one each in Northern and Upper Eastern regions. This is to foreclose any penetration by the unwanted traders.
Ghana’s troubled history with competition from foreign traders in its markets goes back to 2007 when the GUTA members attacked non-Ghanaian traders and locked up their shops out of which at least 150 were owned by Nigerians. Some draconian conditions, including hefty fees were also prescribed, including raising the minimum capital for foreigners to do business in the country from 300,000 U.S. dollars to 1 million U.S. dollars.
Meanwhile mediation efforts by many interest groups had been going on since, with limited success. For instance, in 2012 a delegation from the ECOWAS Parliament headed by the Commission’s Chairman of the Committee on Human Rights and Child Protection, Brima Kananda intervened and obtained reprieve, although it was a temporary one.  Even last year, Nigeria’s Minister of State for Trade and Investment, Dr Samuel Ortom, had talks with Ghanaian government officials on the issue. With the latest development however, it would seem that these efforts had yielded little returns.
While the Ghanaian government reserves the right to enact and enforce laws to protect its citizens and certain aspects of the economy, such actions should be consistent with international conventions to which the country is a signatory, lest it opens itself to justifiable reciprocal measures.
The contributions of foreign traders, in particular the more than 2 million Nigerian traders, to the Ghanaian economy should not be underestimated, but recognised and applauded. For Nigerian traders in Ghana, the restriction is particularly significant given that some of the markets now zoned out of their reach were built by them. That notwithstanding, Nigerians in that country or elsewhere need to be law abiding, as the Nigerian High Commissioner to Ghana, Seyi Onafowokan, has advised them to be.
The Ghanaian situation provides lessons for Nigeria with respect to the need to protect its own nationals from undue competition from non-Nigerians who presently dominate the economy. But this should be done in a rational manner.  Protectionist economic policies are positive instruments so long as these are not overly discriminatory and are not targeted as punitive measures at specific groups.