The Ghana Union of Traders Association (GUTA) in the Eastern region has closed over 38 foreign-owned retail stores in Koforidua, mostly selling mobile phones, through an enforcement operation.
The Ghana Investment Promotion Act (Act 865), which forbids foreigners from conducting retail commerce in the nation, is the subject of this lawsuit in response to GUTA’s allegations that the government has failed to adequately implement the law.
In a media interview, Mr. Samuel Aikins, the Eastern Regional Vice Chairman of GUTA, voiced his worries about how the country’s local companies are suffering as a result of the GIPC law’s lax implementation.
He made the observation that these foreigners frequently provided subpar goods without taking into account the needs of customers.
“Their activities are affecting the economy. Look at the soaring inflation, rapid depreciation of the Ghanaian Cedi, the collapse of the manufacturing sector, escalating shop rental costs, and damage to the export sector, among others” he stated.
He advised foreigners doing retail business in Koforidua and other Eastern regions to leave the marketplaces ahead of the Christmas season in order to avoid penalties.
If the foreigners do not cooperate, he threatened to shut down the stores with the GUTA Eastern Regional branch going on the rampage.
He assuaged concerns that what they were doing would cause a yuletide lack of merchandise.
Ghana and Nigeria, whose people have overtaken the local market in retail industry, are experiencing diplomatic tensions as a result of clashes between GUTA and international retailers.
In order to resolve this issue, Ghana and Nigeria issued a joint communiqué in 2021 during the Extraordinary ECOWAS Summit.
Nigerians were previously prohibited from engaging in Ghana’s retail sector under the GIPC Act 2013, Act 865, but this agreement removed them from the $1 million minimum capital requirement.
Following the conference, Nigeria’s House of Representatives received an official presentation of the exemption from Ghana’s Speaker of Parliament, Alban Bagbin, which sought to resolve a 25-year retail dispute between the two countries.
Speaker Alban Bagbin declared that the retail standoff between the two countries ended with his involvement. He called attention to a reexamination of section 28(2) of the Act’s one-million-dollar minimum threshold for trading firms.
The goal of the modification was to make it easier for the impacted Nigerian retail traders who had previously been shut out of the market to resume operating their companies on a regular basis. In addition, a specific exception was made, lowering the stamp duty requirement to 0.5, with the understanding that Nigerian traders would not be subject to it.
GUTA vehemently objected to this new structure and promised to veto any changes made to the regulations.
The union’s position appears to be motivated by worries about international merchants’ possible impact on the local market as well as competitiveness.