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Business News of Monday, 24 August 2020


Ghana-Nigeria trade war: What you should know about the law

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There’s been a seeming tension in the trade industry in recent times due to misunderstanding between Ghanaian traders and foreigners on their legality to engage in retail businesses in Ghana.

There have been reports of closure of retail shops owned by foreigners by a task force put together by the Trade Ministry. The Public Relations Officer of the ministry had said it is against the laws of Ghana for foreigners to own retail shops in the country.

In this report, GhanaWeb throws light on laws that govern both the investment and trading activities in the county.

About the Ghana Investment Promotion Centre (GIPC) law Act 2013 (Act 865).

This legal framework is to encourage and promote investments in Ghana by providing an enabling environment for investors. But some businesses, per the law, are not to be owned by foreigners, neither are they to be seen engaged in it. Amongst such businesses include, the sale of goods in a market, selling of goods in a stall at any place, operating a beauty salon or a barbering shop, engaging in the retail of finished pharmaceutical products among others.

However, foreigners may be given the go ahead to operate in a trading enterprise only if they invest not less than US$ 1,000,000 in cash or via goods and services relevant to the investments.

Also, they are required to employ at least 20 skilled Ghanaians at their workplace based on Section 28 (4) of Act 865.

Foreigners who engage in retail trade without meeting the minimum capital requirements mentioned above commits an offence which is against the GIPC law.

Ghanaians or non-Ghanaians who also let out a stall in a market to a foreigner also commit a breach of Act 865 and is equally punishable by law.

About the ECOWAS protocol law.

Chapter II Article (3) of the Revised Treaty of ECOWAS stipulates the removal of trade barriers and harmonisation of trade policies for the establishment of a Free Trade Area, a Customs Union, a Common Market and an eventual culmination into a Monetary and Economic Union in West Africa.

The ECOWAS Protocol ensures the free mobility of the community citizens. Based on this, most foreigners are seen in other African countries, of which Ghana is of no exception.

But in Ghana, the GIPC law clashes with the ECOWAS protocol and this has created a barrier between Ghanaian traders and foreigners.

The scuffle between Ghanaian and Nigerian traders.

Over the years, there’s been a back and forth with the closure and reopening of foreign shops at Tip Toe lane, Abbosey Okai, and Rawlings Park.

The Ghana Union of Traders Association (GUTA) has been on the neck of foreigners engaging in retail businesses to submit all legal documents that permit them to operate. Their action, GUTA says, is based on the GIPC law.

The Nigerian Union of Traders Association (NUTA), on the other hand, justify their engagement in retail trade on the implementation of the ECOWAS protocol. This misunderstanding between the two has led to several nationwide demonstrations.

The situation will remain the same if the government does not find a lasting solution to this problem.

Harmonise GIPC law on retail trade with ECOWAS protocol – Nigerian traders in Ghana.

For peace to prevail, the General Secretary for the All Nigerian Community in Ghana, Isaac Osahon Ekhator, has requested that the GIPC law be amended to harmonise with the ECOWAS protocols that allow ECOWAS citizens to freely trade in member countries.

“We feel that in the implementation of the GIPC law, at least there should be a level of human face attached to it because many Nigerians came in here believing that as a citizen of ECOWAS, they are free and they are at liberty to carry out their businesses and conduct their affairs within the ECOWAS space and not undermining the laws of the country in which they are domiciled,” he said in an interview on ClassFM.

If the two trading laws, GIPC law and ECOWAS protocol, are looked into as suggested by Mr Ekhator, there wouldn't be any fight amongst the two countries.

But foreigners must also have all legal documents that will allow them to work here for Ghana to remain a peaceful country.