The Engine of Growth that Runs Over: A Warning from the South African Paradox.

In the featured photo for this article, is the stark reality of the South African situation. It presents two different settlements separated by a tightly secured wall. Walls that permeate every facet of life out there and have stirred rage every now and then instead of stirring an urgency to hold the all important human development conversation we are not having in Africa. All governments across Africa celebrate private sector growth. We beg for multinationals. Our budgets annually boast of the ever increasing foreign direct investments while our young people; even graduates with enormous potentials, sit on the pavements of this life, with nothing to do and nowhere to go.

South Africa now is that conversation made visible. And it is unfortunately, an ugly one.

Let me say what diplomats will not. South Africa is a developed country with a Third World street war! Its stock market looks sophisticated, banks are global, their technology sector leads the continent, and yet its townships burn with this rage and fury that the wealthy suburbs never see. Unemployment stands above 30% officially and closer to 45%, to count those who have simply given up. Youth unemployment hovers around 60%. Yes, Sixty percent! That to me, is a whole generation written off, rather than the popular inclination to read it off as some economic statistic.

And then we ask: why do South Africans attack foreigners? Why do they harass our Ghanaian brothers? burn Somali shops and chase out Zimbabwean traders? The easy answer blames xenophobia! The lazy answer would probably go for racism! Yet the truthful answer is far more uncomfortable. The most sincere answer is that their government since the end of the apartheid regime, handed over development to private capital without any binding rules to ensure that locals would benefit. Multinationals came in, extracted value and still do, built supply chains that imported everything in the most profitable industries from conveyor belts for the mining companies to computer chips for telecommunications. And they employed the skilled few while leaving the masses to fight over the scraps of the informal economy.

That is the paradox. Yes indeed, Private sector growth happened. Yet indeed, it happened without the people.

Meanwhile, the foreign nationals you see selling vegetables on street corners and running spaza shops in townships did not cause this problem. They simply stepped into a vacuum in a seeming rapidly developing country. The government just could not put in steps to license local businesses, refused to enforce zoning laws, refused to build local manufacturing capacity, and refused to train its own people. I speak of the ordinary and the masses who now occupy the slums and have become receivers of the globally uncanny tags as tugs involved in xenophobia. So the foreigners came because they had no other choice. They have worked harder, saved more, and built what locals could not. And when locals looked around and saw their own poverty next to immigrant success, they did not march to the seat of government. They did not demand accountability from their councilors. They picked up stones and weapons to destroy shops and belongings of these foreigners.

But this is the trap. Key figures in the South African government join their people to blame immigrants for the hardship, as locals continue to unleash terror. Meanwhile, multinationals draw deep from their resource base, make huge profits and nothing really changes.

The victim identity I have written about in times past, bears repeating. A person who has suffered for decades can become attached to that suffering. It becomes their identity and claims for sustenance. It becomes the only power they have. South Africans have been told for the past thirty years, same time span China has transformed from a poor communist state into a first world country, that they are victims of apartheid regime. And that is true. But the truth has curdled into a weapon. Instead of building cooperatives, pooling savings to buy wholesale and demanding local content laws, many have chosen to blame anyone who looks different and sounds different. They don't care what other African countries' contributed to their freedom. The victim card becomes a trap. And the trap keeps indigenes there, poor.

Yet, let me quickly add that Multinationals are not innocent in this dysfunctional set up. They have been accused of extracting precious resources without building the very indigenes and custodians. They have created a classification of society where black communities abandoned in slums, largely do not and cannot belong to those who draw premium livelihood resources available in their own country. In some cases, locals have complained these foreign companies have employed other Africans because they are cheaper and more desperate. They have lobbied against progressive taxation. They have kept township supply chains closed to local owners. A study of thirty large multinationals operating in South Africa found that less than 5% of their procurement came from black owned township businesses. That again is an act of deliberate exclusion.

And the government let them. Because the government benefits from the same elite network. Black Economic Empowerment became an enrichment body for a connected few while the masses got nothing except the right to blame foreigners. Tenders for juicy contracts keep going to connected loyalists of the ruling class. Licenses for various operations required bribes. Local manufacturers collapsed because no one enforced local content rules. The big mines import everything. The telecoms build towers and hire few locals for management. The financial sector thrives while the townships survive on airtime sales and funeral insurance.

So who is to blame? The government is the arsonist. It burned local economic capacity and then blamed immigrants for the smoke. Multinationals poured petrol in the furnace by extracting value without planting trees. And ordinary South Africans attacked the wrong target instead of storming the Union Buildings.

But to bring this closer to home, Ghana is not exempted from this cycle. We have seen the same forces at work, and the warning signs are clear to the well discerning.

Look at our mining communities. Ghana has surpassed South Africa as Africa's leading gold producer, a position that has brought in billions of dollars in export revenue. Gold alone for some time, accounted for more than half of Ghana's total exports and a significant chunk of government tax revenue. But this growth has come at a cost that foreign investors do not pay. Deadly clashes between local residents and mining companies have intensified. In September 2025, a local politician, the Assemblyman for Manso Aboabo was shot during a protest by youth who accused the mine of neglecting community development.

He was killed at the Asanko gold mine during a confrontation between youth and soldiers deployed to protect the facility. In Obuasi, where AngloGold Ashanti operates one of the country's largest mines, violence erupted again in January 2025, leaving at least seven people dead after soldiers intervened against locals accused of trespassing.

What are these communities protesting? The same thing South Africans are protesting. Insufficient investment in local development. Displacement without compensation. Pollution of rivers and farmlands. And most critically, the feeling that mining companies extract wealth from their land while employing foreigners and leaving local youth with nothing. A recent exploratory mission took me to the Manso enclave. Upon reaching a community called Tontokrom, my team and I were greeted with the situation of a hungry, desperate, tired and charged youth, that have taken over an old mining site belonging to Asanko mines. Their current resolve is to extract the gold themselves to enrich their community that has no real development indicators to boast of, after all these years of mineral extraction by the Gold mining companies.

A similar situation is seen in the Nzema East community, where youth recently demonstrated against Adamus Resources Limited. They demanded that part of the mining concession be allocated for community mining. Their spokesperson asked a question that should haunt every African leader: "Why are local people sidelined while foreigners are welcomed onto the same concessions?"

The government has noticed. At the 2026 Mining Local Content Summit, the Lands Minister issued a blunt warning against foreign companies hiding behind Ghanaian names, a practice called fronting. He called it a theft of opportunity and a betrayal of everything local content stands for. The President has set a target to eliminate raw ore exports within five years and force mining companies to refine in Ghana. These look like nicely dressed words. But the crisis in Obuasi, Asanko and Nzema East shows that words are not enough. Local content laws are being bypassed, communities are being militarized against and unfortunately, the engine of growth is running the growth vehicle over the very people whose land contains the gold.

Even at our spare parts markets, the tension between local traders and foreign nationals has been simmering for years. At Abossey Okai spare parts market and Suame Magazine in Kumasi, the Ghana Union of Traders' Associations has repeatedly warned that the government's failure to enforce existing laws around retail limitations for foreign traders will force locals to take justice into their own hands. The law is clear. Section 27 of the Ghana Investment Promotion Centre Act prohibits non-citizens from engaging in retail trading, hawking, or selling goods in stalls and markets. Foreigners can only do retail business if they invest at least one million dollars and employ twenty Ghanaians. Yet in practice, Chinese and Nigerian traders operate small stalls without meeting these requirements, and the government looks away.

The result is exactly what we see in South Africa. Resentment! Accusations of unfair competition! Demands for evictions and the constant, credible threat that locals will take the law into their own hands. The National Vice Chairman of GUTA recently warned: "It will get to a point where local traders will take the law into their own hands and start closing the shops of foreigners operating in Ghana. As citizens, we also have the right to enforce the laws as long as they exist. But we do not want to do that because it creates chaos" .

Trade wars have already erupted. At the Adjen Kotoku onion market in Accra, Ghanaian traders and youth groups have accused Nigerian wholesalers of selling directly to consumers instead of selling in bulk to local middlemen. Local task forces have gone ahead to seize 16 Nigerian trucks. Nigeria retaliated by suspending all onion exports to Ghana, getting stranded some 59 Ghanaian owned trucks at the border and sending food prices climbing . This is fuelled by the same elements that drive South African xenophobia: a government that refuses to enforce clear rules, leaves locals to compete with foreigners in a deregulated chaos, and then acts surprised when violence breaks out.

I could give more examples to prove the paradox in Ghana is identical to the paradox in South Africa. We have grown economically with our gold exports booming. Our extractive and manufacturing sector investment climate has attracted multinationals. But that growth has not reached the young person in Obuasi who watches foreign miners work on his grandfather's land while he has no job. All because the government claims to own the minerals underneath our soils. That growth has not reached the spare parts dealer at Abossey Okai who watches a Chinese trader sell the same parts without paying the same taxes or meeting the same permit requirements. And one day, like we have in South African streets now, these young people and the spare parts dealers will not march on to the Jubilee House. They will pick up stones, blame and terrorize the harmless foreigner standing closest to them.

This is the danger! And it is not alone of some distant future danger. It has started. In South Africa it has become endemic. In Ghana, we are already seeing the clashes, the protests, the silent trade wars, the threats of self help enforcement. The only difference is that South Africa is further down the same road we are traveling in severity and madness.

What must be done is not complicated. It is just difficult because it threatens those who currently benefit. A mandate that every multinational operating in our country must have real local ownership, not by connected elites but by community trusts in the poorest districts. Government must enforce local content laws with real penalties. If a mining company imports goods that could be sourced locally, fine them and put that money into a community skills fund. And then my popular advocacy to revolutionise our informal sector comes in handy: License every informal business, foreign and local, under the same rules. No more chaos where anyone can set up anywhere and then blame the government for not protecting anyone.

And for the love of African unity, we must of necessity harmonize our trade laws with our regional commitments. The ECOWAS protocol says a Nigerian has the right to establish a business in Ghana. Ghanaian law says a foreigner needs half a million dollars to trade. These two things cannot both be true. The result is legal confusion that pushes traders into the shadows and creates exactly the kind of unregulated chaos that leads to xenophobic violence. We must create a legal pathway for small and medium African enterprises to trade across borders, Register, Tax and Protect them. And make the rules clear so that locals know what is legal and what is not.

Governments must be bold and serious to Prosecute xenophobia as a national security crime. The Police cannot stand down during attacks. Citizens must see through the veil. Politicians must not be allowed to use immigrants as scapegoats for their own failure to govern and fix the mess.

Furthermore, elite empowerment must be replaced with what should have existed from the beginning: a well orchestrated and coordinated geographic empowerment, community empowerment and poor people's empowerment all founded on identifiable indicated. This ought to be done with deliberate efforts to neutralize the robbery situation of shares for the well connected and tenders for party donors. But real ownership of supply chains by local people who live and are affected by the hazards of extractive industries.

The lessons from Soweto and Durban are devastatingly clear. A private sector left to operate without an umpire will grow, produce profits, attract investment will eventually leave the local population behind. That is what we are seeing happen across the continent. Like I said, Ghana is not immune and South Africa is merely further along the same perilous path.

The question for Ghana and for every other African leader reading this is simple. Will you learn from South Africa or sit numb in wait to become South Africa?

Our young people are watching. And they are running out of patience!

Thanks for reading!
Michael A. Sarfo-Kantanka.
maskant25@yahoo.com
References:
1. Ministry of Lands and Natural Resources, Republic of Ghana. (2026, February 18). “We will not condone any form of fronting using Ghanaians” – Lands Minister warns.

2. Information Services Department (ISD), Ghana. (2026, February 19). Lands Minister Calls for Greater Ghanaian Ownership in Mining.

3. Ghana News Agency (GNA). (2026, February 20). Lands Minister speaks against fronting, calls for genuine development.

4. Dubawa Ghana. (2025, September 14). Does Ghana’s investment law ban all foreigners from doing business? (Fact-check on GIPC Act, Abossey Okai, and Suame Magazine).

5. Ghana Broadcasting Corporation (GBC). (2025, September 7). GUTA slams governments over failure to enforce trade laws. (Includes warnings about locals taking the law into their own hands).

6. ACN International. (2025, September 9). Abossey Okai Traders Warn Foreigners.

7. Nigerian Tribune. (2026). Nigerian onion traders suspend exports to Ghana, give reason. (Adjen Kotoku conflict).

8. Citi Newsroom. (2026, April 7). Ghana onion traders commit to ECOWAS rules following Adjen Kotoku tensions.

9. African News Agency (ANA). (2026, April 27). Spaza shop crisis: UN pressures South Africa to address rising anti-immigrant tensions. (Current 2026 violence, UN intervention).

10. GBC Ghana Online (Opinion). (2026, April 22). Direct Warning: When the foreigners are gone, who’s next? (By Kojo Asiamah Addo. Analysis of the "cannibalization" effect if foreigners are removed).

By Michael A. Sarfo-Kantanka

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