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Opinions of Thursday, 21 September 2006

Columnist: Ankomah, Afua

As The Nation Of In And Outdoor Shopkeepers Struggles To Surviveâ?¦

The news sneaking up on the headlines these days is that Ghana’s retail sector is crumbling at the hands of foreign competitors. The news that never really made the headlines in the minds of policy makers was that our rice and poultry industries were on the verge of collapse, and indeed, still are. Of course, it’s not just rice and poultry. If it’s an industry (you name it) chances are it’s not doing too well right now.

The retail sector is a key component of any economy – if there is no one to distribute the goods produced, the nation remains stagnant. But take a closer look at what the real argument is, and the question becomes “Why on earth should anyone support that?”

Traders nationwide have embarked on a crusade that can easily be defined as protecting their own interests. While there is generally nothing wrong with that, it raises the question whether these interests are worth protecting.

First question – where do the goods that retailers are looking to ‘push’ originate? China, the EU, the US…

Second question – who are the main beneficiaries? Well, even before import duties have been paid (add to national coffers here), employment has been created, no value has been added to the product and profit margins have been skimmed off the top – China, the EU, the US…

Of course, there are other countries that benefit from the retail sector, but looking at the inevitable trade deficit Ghana continually registers and debatably, perpetually will, the argument that the retail sector is skewed against supporting the economy becomes more real. “Oh, but we have registered surplus income!” you cry, “It is one of the criteria for establishing a common currency in the West African sub-region!”

Agreed, but where does that surplus come from? Cocoa and gold, generally – when prices and output are good. We are registering deficits because we are importing too much – the nation of shopkeepers is alive and well, and retailers don’t care to hear the phrase ‘made in Ghana’. Let’s look at the reasons, shall we?

Ghana does not produce many of the goods that are sold (for example spare parts and tyres). That may be true, but in that case, what is the rationale for making citizens of a nation that is already suffering pay more for goods that are made elsewhere, that the country does not produce? I would think Mr Chinaman was doing me a favour making me pay less for goods that are not produced here anyway.

The Ghanaian equivalents of these imported goods (for example textiles, paper and poultry) tend to be more expensive and Ghanaian industry isn’t operating efficiently. Right, and the retail sector is operating more efficiently even though it cannot compete because…? The argument that applies to manufacturing, agriculture and other sectors should be made across board – if a product is more expensive and is being sold by a Ghanaian, the Ghanaian isn’t being efficient. It is easier for a retailer to cut costs than a manufacturer, so retailers should bite the bullet first. However, if the argument is seen to have loopholes, those loopholes probably exist for industry as well. In China, you have people working 24 hour shifts producing goods that will be supplied globally. Their cost is probably a fraction of the Ghanaian industrialist’s, and Akosombo really is NOT helping right now. With power rationing and unscheduled cutting, and companies having to lay people off, production costs are being made even higher, and imports are starting to look extremely cheap. But why is it that poor Mr Ghanaman Industrialist is operating inefficiently when Mr Ghanaman Retailer who is facing fewer problems is ‘just suffering’?

Maybe there is a covert plan that no one knows about – maybe the only reason we are struggling for retailers to make their goods more expensive is that there are industrialists in the background who are taking those goods apart, finding out how they work, how they are made, and are planning to manufacture them locally! Maybe a percentage of the high(er) prices the retailers are charging is going into a fund for industrial development of the very same products. Maybe in 10 years, according to that Secret Strategic Plan (SSP), we will have several thousands of small companies producing at lightening speed to out-compete these Chinese!! Maybe the SSP is alive but all very hush-hush!

Unless that is the case, all I can see is that 2008 is around the corner and Everyone and his brother is taking the easy option – retailing non-Ghanaian goods and pocketing the profit…and Everyone and his brother has a thumb and needs to be kept happy.

Anaa?



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