by Tunji Andrews
The Ghanaian Ministry of Trade and Industry has once again moved to force foreign owned medium, small and medium scale enterprises to recapitalise their asset base of face eviction. The move championed by the Ghana Investment Promotion Council (GIPC), GIPC is seeking to review foreign investment laws in the country ranging from $300,000 to $1 million as minimum capital (with 20 Ghanaians employed) requirement as precondition for any foreign investor to do business in Ghana. What this means is that Nigerians and other ECOWAS citizens who go to work and do business in Ghana will have time limit attached to their stay. They will also come under quota restrictions and will have to renew their status at the expiration of their permits. This is against the ECOWAS protocol which allows free entry and exit for West African citizens.
This move is a little worrying for the unity of West African states, as the move also affects citizens from the ECOWAS, with the Ghanaian government classifying them as expatriates under the 2009 investment law. Also, in February of 2013, Ghanaian President John Dramani Mahama said a security task force would be charged to halt the operations of ‘illegal’ foreign gold miners that were, in his words, polluting water bodies in Africa’s second-biggest producer of the metal.
Since 2007, Nigerian traders in Ghana have found themselves at crossroads over a business policy targeted at their businesses in Ghana. At the prevailing exchange rate, the sum adds up to about N164 million. Despite protests from the traders and calls for caution by other ECOWAS members, the GIPC went into action, sealing up thousands of Nigerian businesses in Accra, the country’s capital and other Ghanaian cities.
According to GIPC Act, petty trading, hawking or selling from kiosks at any place is wholly reserved for Ghanaians but that the law actually does not bar non-Ghanaians from operating in the trading sector whether wholesaling or retailing, provided they make the initial equity capital investment in cash or goods of at least the stipulated amount.
Already, the Trade and Industry minister, Dr. Ekow Spio Gabrah, is said to be in consultation with the Attorney-General on modalities for the implementation of the eviction order issued to all non-Ghanaian traders. President of Nigerian Union of Traders Association in Ghana (NUTAG), Elder John Ukala, said there are about 10,000 Nigerians engaged in various trading activities in the country.
Deputy Minister of Trade and Industry, Mr. Murtala Mohammed, who restated the decision in Accra yesterday, insisted that it was not intended to prejudice anybody but was designed to ensure the sanctity of Ghanaian laws.
According to the deputy minister, the government would insist on the implementation of her local legislations and would not hesitate to prosecute anyone who flouts them. The ministry in a public notice last month gave a 30 day ultimatum to all non-Ghanaians operating in their retail markets to relocate or be prosecuted. The deputy minister affirmed that the ministry was currently monitoring the level of compliance by the foreign traders before the task force commenced work.
A challenge with African governments is in pushing inconsistent economic and other unfavourable policies, with the added lack of honouring commitments by successive governments and the energy crisis will continue to be a discouraging factor for foreign, as well as local investors, industry.
The role of governments for ensuring foreign investment cannot be overemphasized in any country, as enabling economic conditions and conducive business environment for institutions and investors is a fundamental prerequisite to attract investment.