Political Independence, Economic Servitude: Why Ghanaian Businesses Flounder Where Others Flourish

It is an open secret that the wealth of this country is largely owned and controlled by foreigners:

In finance: many of the biggest banks and other financial institutions are foreign owned and account for a significant portion of the market share. For instance, there was a recent revelation that indigenous insurance firms account for just about 3% of total insurance coverage for our oil and gas sector. In aviation: we cannot boast of a single Ghanaian owned airline operating internationally.

In mining: the only part we seem to play borders largely on illegal mining or what is popularly known as ‘galamsay’, and even within this space, the Chinese seem to be upstaging us now. In retail and commodities trading: many of the well-known brands are foreign owned and controlled. Heck, even in our cocoa industry (a lifeblood of our economy), besides the unpleasant aspect of planting, harvesting and drying the beans, much of the richer part of the value chain is controlled by foreigners. In mobile telecommunications, ‘overnight’, foreign firms dominated a sector we once controlled...

To give a more specific example: within the past couple of years, Nigerians have managed to dominate the mobile phone and its accessories market in Ghana. The entire stretch of the Tip Toe Lane (a very popular mobile phone market around the Nkrumah circle area) is now almost completely dominated by Nigerians. A situation which has already led to some skirmishes with their Ghanaian counterparts in recent times. This situation was very different from just about 4 years ago, when one could hardly spot a Nigerian in the neighborhood.

The reality is this: whilst we vehemently fought for political independence, it seems to me that, somehow, we failed to lay a solid foundation for economic independence; by creating an environment which fosters local content creation and control.

So what accounts for foreign dominance and elimination of their Ghanaian competitors, especially when we are expected to have the ‘home-front’ advantage? Are they smarter business people? Are they better managers? Do we ‘hate’ ourselves so much that we fail to create a network of mutual support evidenced in other cultures?

The core explanation for this situation might be a bit tricky to fish out from an ocean of possible reasons, but there is some theory going round the circles of people watching this development, which I am happy to present for your perusal:

DIFFERENCES IN ORIENTATION TOWARDS PROFITS: There's an interesting theory that, whereas Ghanaian business people have the tendency to overprice their products as a means of making profits, the foreigner focuses on quantity sold, and are therefore aided by the law of demand. For example, a Ghanaian may sell a phone costing Ghs 400 only when an offer made is a minimum of Ghs 550. A Nigerian, profiting from quantity, 'instead' of price would accept an offer of Ghs 500 and end up selling more of the phones within a shorter stretch of time. The advantage this provides is loyal customers who come for repeat purchases and recommend others to purchase from same vendor. Over time, the survival of the Ghanaian in this market itself is threatened. The Ghanaian is fixated on the first purchase even if it is the only purchase.

HONESTY AS A BUSINESS POLICY: The second theory (and quite a controversial one at that) is that foreign business people are perceived to be more honest. Yes, you heard me right: more honest. This is perhaps connected with the 'multiple purchases profit orientation'. Unfortunately, it appears the average Ghanaian entrepreneur consider themselves smarter at business if they succeed in selling an ‘inferior’ product to an unsuspecting victim at a cutthroat price. Their interest lies on this ‘one big sale’ and not the repeat purchases resulting from right pricing and honesty. It appears we have lost an essential component of business success: TRUST.

SUPERIOR CUSTOMER SERVICE: The whole customer service orientation was largely nonexistent in the Ghanaian business vocabulary until it’s ‘importation’ quite recently. Unlike their Ghanaian counterparts, foreigners are more likely to delight anyone who walks to their shops, much patient and hardly get upset when one does not make a purchase. Not only are they receptive to returns, they encourage them, which builds the confidence of those making the purchases and leads to more and faster closure of deals. It is a very popular belief that excellent customer service mostly accounted for Nigeria's dominance of the Ghanaian banking industry. Whatever creates this business orientation (whether it is culture or because they are operating on a foreign land) is working for them and giving them an important advantage.

MORE AGGRESSIVE AND HIGHER APPETITE FOR SUCCESS: Let me provide an interesting example to buttress this: Back in 2015, a lively Lebanese man opened a small table top 'check check joint’ here in Accra. Today, that ‘joint’ is upgraded to a restaurant which is beautifully taking shape. In just a couple years’ time, it is very likely to become a high-end restaurant which will host your next business meeting. Meanwhile, just around his location are Ghanaian food joints which have operated for decades without any visible change in their circumstance.

It seems that many of the foreign investors are more 'success hungry' whilst we largely become excited over limited success and settle. A little success and the Ghanaian entrepreneur would spend half of their day hunting for likes on social media, purchasing their dream car and looking for awards that add little to their bottom-line. A little success and suddenly the customers who got them where they are no longer matter. So paradoxically, their ‘success’ becomes their nemesis.

ENHANCED NETWORK OF MUTUAL SUPPORT: It is an interesting observation that foreigners operating in the Ghanaian business environment build a solid network of mutual support, which reduces internal competition and fosters collaboration. This allows them to dominate entire value chains which fosters exchange of value within their network. A perceived measure of success for Ghanaian businesses is how many subsidiaries they can incorporate. Today, ‘Group CEO’ is one of the most sought-after titles. When was the last time a Ghanaian entrepreneur, not having the item you intended to purchase led you to another Ghanaian who had in stock? Perhaps a couple of times, that is if they don’t start selling those items a week later. Specialization and mutual support are a catalyst for wealth creation.

A quick clarification here: as a student of economics, I am fully aware that foreign direct investment (FDI) and open economies are crucial to wealth creation in nations. So, this article should not be misconstrued as a criticism of FDI. Apart from the obvious economic benefits that such investments bring, the cultural mix provides a synergy for innovation and collaboration. My point is, this is the only country we can call home, so it is important that we partake in its wealth (this philosophy is not at all different from the orientation of other capitalist economies) – it is why we fought for political independence in the first place.

It is important we look beyond political power and consider ways of enhancing the economic lot of our citizens, which is what true freedom means in the modern dispensation. Because political independence without economic freedom is dignified servitude.

Kwadwo Agyapong Antwi
The writer blogs on social, political and economic issues at www.thinkingwityou.wordpress.com

Follow him on Twitter at kwadwo_aa