GIPC commits to force foreigners out of retail business

Foreigners continue to flood the retail market in clear violation of the GIPC Act which prevents them from doing so. Charles Benoni Okine reports on how the new boss of the GIPC intends to deal with the issue.

The Ghana Investment Promotion Centre (GIPC), has pledged to strictly enforce the laws that prevent foreigners from engaging in retail business in the country.

The acting Chief Executive Officer of the Centre, Mrs Mawuena Trabah, told the Graphic Business that “I am working to arrange a meeting with the Ghana Union of Traders Association (GUTA) to listen to them so we can fashion out a more pragmatic way to deal with the situation”.

In a brief interview after she had presented the 2012 investment report of Ghana, she said “there are laws in the country and everyone, irrespective of origin must abide so we will look at it”.

For instance the new GIPC boss will be faced with the challenge of ensuring that non- Ghanaian traders who are fast taking over the retail business in the country are stopped in their tracks.

In section 18 of the GIPC Act 478, 1994 makes the indulgence of foreigners in the retail operations in the country illegal.

The provision states that “the sale of anything whatsoever in a market, petty trading, hawking or selling from a kiosk at any place, the operation of taxi service and car hire service, all aspects of pool betting business and lotteries with the exception of football pools as well as operation of beauty salons and barber shops” are enterprises wholly reserved for Ghanaians.”

GUTA has been on the government and the GIPC in particular to prevent foreigners from undertaking retail business in the country as per the law.

In spite of the call, very little seem to have been done and the reluctance or otherwise of the authorities to deal with the situation has created the avenue for foreigners, particularly Chinese and Nigeria to flood the retail market.

A task force put together by the then Vice President and now President of the country, Mr John Mahama, has not succeeded in its quest to flush out the foreigners in retail business.

The irony of the issue also has to do with the resistance of some of Ghanaians who want the foreigners in the retail business because of what they claim to be better job opportunities and remuneration given them as compared to the Ghanaians traders.

The last major exercise to flush out the foreigners could not yield any fruitful results because of what the task force described as the complex nature of the situation on the ground.

The exercise conducted in the later weeks of last year revealed that some Ghanaians were fronting for the foreigners, a situation which makes it difficult to deny them the right to sell in the shops they claim not to own.

But Mrs Trebah was of the view that a meeting with GUTA will elicit better understanding of the situation for the right action to be taken as per the law.

2012 Invest results.

Total value of investments into the country last year dropped to $5.63 billion from $7.68 billion recorded in the year 2011.

The drop represents a percentage decline of 26.68.

The amount recorded emanated from a total of 399 projects registered during the year which showed a decrease of 22.37 per cent when compared to the 514 projects registered in the corresponding year of 2011.

However, the figure was 34.80 per cent more than that of the investment inflows recorded in the same election year of 2008 where only 296 projects were recorded.

China dominated as the country with the most investment having recorded 56 projects with Nigeria and India tying with 42 projects each.

In terms of FDI value of projects, Lebanon recorded the highest with US$1,486.20 million followed by British Virgin Island, Mauritius and the United States of America (USA) with US$825.16, US$727.15 and US$500.06 million respectively.

On the fourth quarter results for 2012 she said 94 projects were recorded at an estimated value of GhC1.18 billion representing a decrease of 65.68 per cent compared to the third quarter of the same year under review.

Of the total, 63 of which were wholly-owned foreign enterprises valued at GhC1.05 billion, representing 88.76 per cent of the total estimated value of projects registered.

The remaining 31 were joint ventures between Ghanaians and foreign partners also valued at GhC132.97 which also represents 11.24 per cent of the total estimated value of the projects registered.

However, the initial capital transfers for the newly registered projects during the quarter summed up to GhC29 million.

Of the total investments, the Foreign Direct Investment (FDI) component of the estimated value of the projects registered during the quarter under review was GhC944.47 million, representing 79.86 per cent of the total estimated value.

From the new investment inflows, it is expected that 8,198 jobs will be created; Out of this, the total number of Ghanaians expected to get jobs from the projects in the fourth quarter of 2012 is 7,632 with 566 jobs also expected to be created for expatriates.