Ghana: Foreign Vendors Expanding in Retail Markets

Traders in Ghana are up in arms against the presence of foreigners in the country’s retail business. The Ghana Union of Traders, GUTA, has given affected individuals until the end of June to cease their operations in the sector.

Abiding by retail regulations

Ghana’s retail sector has been solely reserved for nationals as a deliberate government policy. By law any foreigner who wants to engage in retailing must first invest an initial $300,000.

Alfa Abdallah Shaban is the acting general secretary of GUTA. He says the association has no problem with major companies established by foreigners that are providing avenues of employment for workers. What worries him is the growing number of small-scale vendors offering stiff competition to indigenous businesses.

”We have some who are operating illegally in the system. Illegal in the sense that they are not supposed to be in our market," she explained. "It has been spelt out in the Ghana Investment Code but they are there. These are the people creating problems for us. These are the very people we are saying should leave this place."

Stiff competition, challenges

Shaban says the activities of these foreigners pose serious challenges to Ghanaians. He says some members of GUTA are not able to renew leases on rented shops. This is because foreign traders take over such premises by offering large amounts of money, often beyond the reach of their local counterparts.

The aggrieved traders expressed other concerns. On a busy day at a spare parts market in Accra, a trader named Mireku is at work selling car air conditioners. She says the current situation needs urgent attention from policy makers. “The foreigners have come to take dominion over our market. They are bringing in fake spare parts," she noted. "And they are also cheap but ours are original.”

Another trader called Mensah says he pays all relevant taxes on imported goods but some foreigners evade taxes through smuggling. In addition, they get access to cheap credit from their countries of origin. Therefore, they are able to quote cheaper prices and Ghanaian traders find it difficult to compete.

Mensah says the situation, which started with a gradual infiltration by foreigners into the retail sector, is now threatening to get out of hand. “We the nationals are losing our hold on the market, so we think they should be flushed out without delay," Mensah stated. "Otherwise one day we will wake up and the whole retail sector belongs to foreigners.”

Threats, ultimatiums

It is not clear what the consequences of flouting the quit order would be but Emmanuel, a Nigerian trader operating in Ghana, says the threat by GUTA could have dire implications for the country if fully implemented. “It will be a pity if they carry that ultimatum out," he said. "Nigeria and Ghana have been on brotherly relations for a long time. And if that happens, it will spoil many things because we have been here for more than 20 years."

Emmanuel says there will likely be repercussions from all affected countries. Meanwhile, the government is considering raising the minimum capital requirement for foreign traders in retail business to $1 million.