Ghana’s Trade Protectionism Raises A Question

Proshare

Tuesday, August 28, 2018   18.48PM  / By Reuben Abati

 

I got a frantic call from Ghana the other day. It was from Lillian. The Ghanaian authorities were shutting down shops belonging to Nigerian traders at the Kwame Nkrumah Circle in Accra. The Inter-Governmental Task Force set up by the Government of Ghana to regulate retail trade had arrested about 50 Nigerians. Many of them were detained. “The situation is not good at all, someone needs to come to their rescue; “ she said.

 

This is not a new matter. Across Africa, the Nigerian trader is often resented by the local population, on the grounds that Nigerians are either taking over their businesses or their women.  But the reported attack on Nigerians in Ghana is most disturbing. Both countries share many affinities: historical, cultural, political and social. Nigerians love to go to Ghana. It is less than an hour away by air and it is a stable, organised society.

 

Since the reversal of fortunes between both countries, with the Ghanaians who used to flock to Nigeria in the 70s and 80s, now enjoying better prosperity, Nigerians are now the ones going to Ghana in droves in search of economic opportunities or a place to enjoy some sanity, away from the maddening crowd at home.  Given our people’s enterprising spirit, it is not unexpected that Nigerians will dominate the retail market in any country where they are allowed to settle in large numbers.

 

In 1994, Ghana introduced a law called Ghana Investment Promotion Centre Act (GIPCA), Section 19(3) of which says “in the case of trading enterprise involving only the purchasing and selling of goods, which is either wholly or partly owned by a non-Ghanaian, there shall be an investment of foreign capital or its equivalence in goods worth at least $300, 000 by way of equity capital and the enterprise shall employ at least 10 Ghanaians.” Non-Ghanaians are also required to have a residence permit and a business permit. In the past six years, the Ghana Union of Traders Association (GUTA) has been urging the GIPC to take action against foreigners involved in retail business in Ghana who they accuse of pushing them out of business.  There are over 1, 000 retail shops owned by non-Ghanaians across Ghana, most of them by Nigerians. Aggrieved Ghanaian traders want those shops shut down.

 

See: Ghana Investment Promotion Centre (GIPC)

 

In June, the GIPC issued a notice asking the foreigners to obey the provisions of the GIPC Act or close down their shops by July 27. Most of the Nigerian retailers cannot afford $300, 000 – in Naira, that is about N108 million! The businesses they run do not need up to ten staff. These are people selling phones, textiles, electronics, or recharge cards or engaged in some other small-scale enterprise in the markets. Whereas the Ghanaian government has said the law is not targeted at Nigerians, the truth is that Ghana does not want foreigners in the retail business. Foreigners are not allowed to drive taxis in Ghana or run kiosks.

 

Ghana’s trade protectionism raises a question: how far can an ECOWAS member-state go in protecting the sovereign interests of its nationals in the context of binding ECOWAS protocols?  The governments of Ghana and Nigeria should take the on-going development seriously and prevent a breakdown of people-to-people diplomacy. In Kumasi, members of the Ghanaian Traders Association reportedly attacked Nigerian traders and the latter are also threatening to retaliate.  It shouldn’t get to that. 

 

 

Proshare Nigeria Pvt. Ltd.


 

 

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