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09.11.2005 Business & Finance

Ghana’s retail trade under siege

By The Chronicle
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Information gathered by The Chronicle points to a looming threat in the country, as the executive and members of the Ghana Union of Traders Association (GUTA) are gearing up for a massive demonstration to hit the streets of Accra in the next couple of weeks.

Indications are that members of the association have girded up their loins long ago, for what insiders consider to be probably the worst demonstration ever to hit the capital city over their dissatisfaction with foreigners' invasion into areas of the retail sector of businesses, stipulated under our laws to be the preserve of indigenous Ghanaians.

Though the leadership of the association has refused to either confirm or deny this information through the paper's fact-finding mission, reliable sources close to the leadership have hinted that though the leadership has so far restrained members, they may not be able to contain them for long.

Some shop owners of the association told the paper last week that should the authorities fail to take positive steps in forestalling the unrestrained invasion, nothing can hold them back from taking to the streets.

Sources, hinted that notwithstanding the several attempts by the association and other equally concerned bodies to draw the attention of government and other stakeholders of the dangers indigenous businesses are exposed to, little or virtually nothing has been done to forestall what is predicted to be a doom for the economy.

The influx of these foreigners, mostly from the sub-region and China, into the retail area, according to observers, does not only threaten indigenous businesses but also result in a massive evasion of the country's tax system as well as pose security problems, since most of these foreigners are said not to have valid traveling and working documents to enable monitoring of their activities.

Some of the traders believed that all these activities are being allowed to go on under the pretext of ECOWAS protocols, which contravene our sovereign laws on investment.

The situation has prompted many to raise doubts about the vigilance of government and other security agencies in regulating the activities of foreigners in this country, leading to a feeling of insecurity among traders in none than their own country.

Some traders the paper spoke to, expressed grave concern about the strict security checks and at times abuses that they are taken through anytime they were on business trips to countries like Nigeria and Togo, also ECOWAS member countries.

According to most of them, one was not even allowed to sell products from the Ghanaian market in those countries, let alone go into competition with their indigenous businesses and products, as we allowed them to do in this country, as if there are virtually no laws and statutes protecting indigenous businesses.

“Master, just think of the recent action of the Nigerian government to ban the importation of Ghanaian products into that country, what do you think it was about? Nothing, but to protect national sovereignty and indigenous businesses,” said the President of the Ghana Electrical Dealers' Association (GEDA), Mr. J. K. Obeng.

He wondered why the Ghanaian government could, like our neighbours do, enforce the provisions of the investment code, in the interest of local traders, as these activities compound the problem of capital flight we are all complaining about.

Mr. Obeng further indicated that they were not against foreigners trading in Ghana, but that they must find their levels. He said the scale envisaged under our laws for them is as demonstrated by Melcom, Max Mart and a few others, and appealed to the authorities to ensure that others got into that scale of trading, but not to displace the indigenous retailer.

Some of the traders questioned whether the Ghanaian government gives credence to national sovereignty and constitutional provisions or kowtow to unfavorable international protocols, which have severe implications for the economy.

Meanwhile, under part two of the provisions of the Ghana Investment Promotion Center Act, 1994 (Act 478) captioned 'provisions relating to investment', Clause 18 reads “the enterprises specified in the schedule to this Act are reserved for Ghanaians and may not be undertaken by a non Ghanaian”.

It goes on in clause 19 (2) to state that an enterprise in which foreign participation is not permitted under subsection (1) of this section shall not be established or operated by a non-Ghanaian unless “in the case of a joint enterprise with a Ghanaian partner, there is investment by the non-Ghanaian of foreign capital of not less than US$10,000.00 or its equivalent worth in capital goods by way of equity participation”.

Where the enterprise is wholly owned by a non-Ghanaian, there is an investment of foreign capital of not less than US$50,000.00 or its equivalent worth in capital goods by way of equity capital.

Under section 18 of the same Act, captioned 'enterprises wholly reserved for Ghanaians', “the sale of anything whatsoever in a market, petty trading, hawking or selling from a kiosk at any place and all aspects of pool betting business and lotteries, except football pools, with the operation of beauty salons and barber shops” are all reserved for indigenous Ghanaians.

Notwithstanding the evident provisions of this and other Acts and statutes, obviously intended to protect indigenous businesses, foreigners have been allowed to ply and exploit all areas of the economy without consideration for its effect on indigenous businesses.

It would therefore not be out of place for any individual or corporate entity to say that government and other responsible institutions have either by sheer negligence or total disregard for the constitution, allowed these activities to plunge the nation into doom.

The paper's sources also hinted that the association had sent several letters to the Ghana Investments Promotion Center (GIPC) and to the trade ministry and the parliamentary select committee on trade.

The Chronicle gathered from some of the traders that GIPC seem to lack the powers to enforce their laws, moreso, as their business has been to try to invite in investors. The trade ministry was however said to have always treated the concerns of the traders with contempt.

By press time, The Chronicle gathered that the parliamentary committee on trade was considering a meeting with the aggrieved traders by the middle of this week, to consider the concerns of the traders and calm them down so they do not take to the streets.

GUTA, is the umbrella body of 12 trading associations that include, Fishing Net Dealers Association, Ghana Electrical Dealers Association, Ghana National Spare Parts Dealers' Association, Kantamanto Traders Association, Okaishie Traders Association, Kaneshie Traders Association etc.

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