Ban on foreign traders, who speaks for Ghanaian consumers?

The brouhaha over foreign retailers needing $300,000 to do business in Ghana has died down. But concerns about the impact of its implementation continue to fester, especially among our ECOWAS neighbours Nigeria .

 
Personally, I think the proposed ban on foreign retailers in Ghana is a bad idea. That the police will do the bidding of Ghanaian traders to get rid off competition through a joint taskforce is even more ridiculous.  

 
As traders protect their turf with the support of the state, the group that needs the most protection, Ghanaian consumers have been left high and dry.

 
So who speaks for Ghanaian consumers and why have their views not been sought in this matter?

 
The Ghanaian consumer is always an afterthought. No one speaks for them and nobody seems to care about their plight. In fact, there is no consumer protection agency or competition bureau to check the anti-competitive behaviour of Ghanaian businesses. There is a Public Utilities Regulatory Commission, but its activities are shrouded in secrecy and focused mainly on the public utility sector.

 
As a result, Ghanaian consumers have for years been abused by retailers. From higher prices to poor customer service, including insults and cheeky responses, the Ghanaian consumer has seen it all. These poor consumers therefore need a break. And if the competition offered by foreign traders is what it will take for this suffering to end, then so be it.

 
I am not saying the presence of foreign retailers will be a panacea to the numerous challenges facing the Ghanaian consumer but at least it will bring some competition. And as every consumer knows, having businesses compete for your attention and money is a good thing. The numerous price promotions, special offers, and marketing campaigns that businesses must engage in to win the customer can be empowering. It can also lead to lower prices, freedom of choice and improved access to services.

 
Competition is also good for the general economy. It increases productivity and encourages investment. An open economy also drives bigger innovation. If in doubt, check the telecom sector. Not too long ago, when there was no competition and Ghana Telecom was king, getting a landline or cell phone was like pulling teeth. One had to beg, bribe, cajole and in some cases agree to the sexual advances of the corporate elite before getting connected. Even after getting your phone, lack of competition meant prices were exorbitant and services very poor.   There was no innovation. Services remain poor but today cell phones are everywhere. They are cheap, sexy and cutting edge. Most importantly, they don't require you to commit one of the deadly sins to get connected. In fact, through number portability, consumers can now move from one service provider to the other with ease. While improvements in service delivery are still needed, I am sure everyone will agree that opening up the telecom sector has been a boon for consumers.

 
Compare the telecom sector to other sectors of the Ghanaian economy where there is no competition such as the electricity and transportation sector and the import of my argument becomes obvious. In the southern part of Ghana , ECG is the main, in fact, the only provider of electricity. They enjoy absolute monopoly. They can disconnect your power supply at will, especially when you don't settle your bills on time. But will not compensate you for your losses when the lights go out abruptly or they engage in rotating blackouts. Try calling their office to seek an explanation for the discrepancy on your bill or to ask about when power will be restored and the experience could send you to a mental institution.

 
The transportation sector is even worse. Lack of competition means buses, trotros, trains (i.e. if they exist) do not run on time. They are dirty, rickety and poorly maintained. As a result they break down frequently and often with devastating consequences as passengers are left stranded or dead through avoidable accidents.

 
Fare hikes are common fare. All a driver needs to increase fares is a whim, a budget announcement or an anticipation of possible increases in petrol prices. What impacts such fare increases would have on consumers are not considered. In fact, consumer interests or perspectives do not feature in the pricing equation. Passengers are literally taken for a ride because the GPRTUs and PROTOAs know that nobody speaks for the consumer in this country. And woe betides any “too known” passenger who dares to speak up against the tyranny of the transport owner, the driver or the aplanke. He or she could receive some verbal slaps or would be left on the streets for having the effrontery to stand up for their rights.

 
There are many more sectors of the economy where lack of competition is forcing Ghanaians to either pay too much or endure mediocre services. This is where the authorities and the Ghanaian traders associations should be focusing their efforts and not on foreign traders doing legitimate business in this country. If the authorities are concerned about the non-payment of taxes by foreign traders because they are mostly in the informal sector, then why not formalize their operations?

 
One of the myriad reasons given for enforcing this ban on foreign retailers is that it is the law. If this is the case, then it is a bad law. The framers of the Ghana Investment Promotion Act and the legislation requiring $300,000 to begin retailing may have had good intentions. But good intentions do not necessarily translate into good laws. And as the current confusion and angst among our West African neighbours indicate, this law is having unintended negative consequences. The authorities must eat humble pie and revise this law as soon as possible.

 
What Ghanaian traders and the government need to realize is that Ghana 's economy is becoming more and more integrated into the global economy. In this environment, protectionism and isolation will not work. We need to remember that Ghanaians are everywhere, doing business, both legitimate and illegitimate. They could be at the receiving end of similar policies which may be inimical to their economic success. Ghana has also signed several international agreements, including ECOWAS protocols that call for national treatment and frowns on discriminatory practices. We need to respect these agreements.

 
If Ghanaian retailers want to drive out their competitors, they should do it with competitive prices, quality products and excellent customer service rather than through protectionism and xenophobia.   The government should not only consider the interests of retailers but also those of consumers in this ongoing saga. Consumers need quality products at affordable prices. They also need respect. If local retailers cannot meet this minimum standard, then they have no business being in business.   Chasing away foreign competitors under the guise of upholding an archaic law will provide relief, but only temporarily.   For sooner or later consumers will see through the ruse and rise up to demand their right.  

 
Ernest Opoku-Boateng, PhD