Foreign Traders in Limbo

Hannah Tetteh - Ghana's Minister of Trade and Industry

 Posted on: www.dailyguideghana.com 

By William Yaw Owusu

Accra, Monday October 22. 2012

THERE IS going to be another showdown between the authorities and foreign traders following the expiration of the grace period granted them to regularize their retail businesses.

The decision by government to invoke the Ghana Investment Promotion Commission (GIPC) Act of 1994 to protect Ghanaian businesses has attracted cold reaction from countries such as Nigeria and China whose nationals dominate the retail business in the country.

The foreign traders had been given a reprieve by government in July to enable them regularize their businesses and leave the retail sector to Ghanaians following public concerns about the manner in which foreigners had taken over the business environment and the grace period expired on October 16.

The taskforce - made up of officers from the Registrar General’s Department, Ghana Investment Promotion Center, Ghana Revenue Authority, Police, Immigration Service and Ministries of Trade and Foreign Affairs – has already served notice to the traders in a letter that a grace period given them had expired and that they must move out.

To avoid further embarrassment, Nigerian traders operating in retail markets reserved for Ghanaians have turned to the ECOWAS Parliament to intervene in moves to kick them out.

They want the ECOWAS Parliament in Abuja to stay the intended action of the Ghanaian authorities so they could have more time to sort things out.

However, Director of Domestic Trade at the Trade and Industry Ministry, Ntim Atuahene is reported to have told Joy Fm the taskforce will go ahead with their action.

“We gave a deadline to all of them, ECOWAS and non-ECOWAS non Ghanaians had up to 16th October to leave the markets, so the law will be enforced,” he warned.

Under the GIPC Act of 1994, foreign traders are expected to invest $300,000 in trading activities, employ at least 10 Ghanaians and operate in any commercial area, not a market.

The Act does not prevent foreigners from trading in Ghana but allows foreigners to trade on a large-scale while petty trading is reserved for Ghanaians.

The controversial capital base and employment requirements had caused a lot of furore among Nigerian businessmen in Ghana.

Earlier, the Nigerian Federal government together with the Foreign Affairs Ministry explored possible diplomatic means to stop what it called “discriminatory and unfair trade laws” and the matter subsided but with the current notice, tensions are likely to rise again.

Some experts have said it would be practically impossible for the taskforce to expel the foreign business community particularly Nigerians because of the pivotal role they play in the economy of Ghana.

In July when the Ministry of Trade and Industry undertook this exercise it was stated that it was taking steps to enforce the Ghana Investment Promotion Centre Act 1994 (Act 478) which made it quite clear that activities that were categorized as petty trading, and small trading businesses were reserved in the act for Ghanaians.

According to the ministry, the act did not prevent foreigners from trading in Ghana; it however provided for a situation where foreign traders were expected to engage in larger scale trading activities that indeed provide Ghanaian consumers with wider product choices.

“However recognizing that petty trading is an area which does not require a large capital outlay in starting a business, it was decided to reserve that as an area of operation for Ghanaians,” the ministry said in a release issued in July to clarify matters.