Ghana looks like it is taking steps to bring to an end the long drawn-out crisis between Ghanaian traders union and foreign retail traders in the country. Ghana’s Ministry of Trade and Industry has revealed that the country is working to address issues about foreigners engaged in retail business in Ghana, an action that violates the Ghana Investment Promotion Council (GIPC’s) GIPC Act.
“As directed by his Excellency, a technical sub-committee has been put together to ensure the implementation of the president’s directives on this matter”, Mr. Ntim Odonkor, a representative of the Minster of Trade and Industry said during the inauguration of the Tenants of Makola Shopping Mall Association, a branch of the Ghana National Union of Traders Association (GUTA)
“Secondly, parliament has charged its subsidiary committee on Trade, Industry to study and make recommendations in a by-partisan manner with a view to finding a sustainable solution to this issue”, he added.
Here Is All You Need To Know
- This latest move is coming on the heels of concerns raised by members of GUTA over some foreigners engaged in retail trading.
- According to Mr. Ondonkor “the issue of foreigners taking over trading activities reserved for Ghanaians which has been your concern sometime has also come to the notice of government.’’
A Look At The Controversial Section 27(1) of Ghana’s Investment Promotion Center Act
According to Section 27 (1) of the GIPC Act, a person who is not a citizen or an enterprise which is not wholly-owned by a citizen shall not invest or participate in the sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place. The list of prohibited trading activities are:
- The sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place;
- The operation of taxi or car hire service in an enterprise that has a fleet of less than twenty-five vehicles;
- The operation of a beauty salon or a barbershop;
- The printing of recharge scratch cards for the use of subscribers of telecommunication services;
- The production of exercise books and other basic stationery; f. the retail of finished pharmaceutical products;
- The production, supply, and retail of sachet water;
- All aspects of pool betting business and lotteries, except football pool.
Consequently, enterprises eligible for foreign participation and minimum foreign capital requirement are as follows:
A person who is not a citizen of Ghana may participate in an enterprise other than the retail activities specified in section 27 if that person
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- In the case of a joint enterprise with a partner who is a citizen, invests a foreign capital of not less than two hundred thousand United States dollars in cash or capital goods relevant to the investment or a combination of both by way of equity participation and
- The partner who is a citizen does not have less than ten percent equity participation in the joint enterprise; or
- Where the enterprise is wholly owned by that person, invests a foreign capital of not less than five hundred thousand United States dollars in cash or capital goods relevant to the investment or a combination of both by way of equity capital in the enterprise.
- A person who is not a citizen may engage in a trading enterprise if that person invests in the enterprise, not less than one million United States dollars in cash or goods and services relevant to the investments.
- For the purpose of this section, “trading” includes the purchasing and selling of imported goods and services.
- An enterprise referred to shall employ at least twenty skilled Ghanaians.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com