CLAMPDOWN ON FOREIGN RETAIL BUSINESSES IN GHANA: LESSONS FOR CONTINENTAL UNITY

  Image  The recent knee-jerk implementation of the Ghana Investment Promotion Centre (GIPC) Act 974 of 1994 has left many unanswered queries on people’s minds. One of the inescapable questions is; why has this law not been implemented over the years? Because if it were, the problem would not even arise in the first place. It is safe to assume quite spiritedly that numerous other laws are in the books never to see any scintilla of implementation. But the more important question perhaps is; what does this mean for the integration of the African continent, given that most of those affected by this law are Africans?

   The law requires foreign retail enterprises to invest a benchmark minimum capital of GH 300000 and to employ at least ten Ghanaians. And the designation “foreign” includes ECOWAS citizens and people of other African nationalities. It must be on record that the ministry of trade and industry has exempted ECOWAS citizens from the 300000 benchmark capital. However, the law and its implementation thereof still leave much to be desired. It raises significant questions regarding African unity and the stage it is. Why must African countries still define other Africans as foreigners? Why would ECOWAS protocols still give room to legal regimes in member countries that are “oppressive” to other member states? This clearly indicates that we are still at an incipient stage and that the process has been very incomprehensive. But most importantly, it reinforces the integrationist stand that we need to do more to foster integration politically and economically. The loose nature of unity is killing Africa fast.

   Perhaps one of the fatal consequences of this disunity is the exploitation still ongoing of Africa by Europe, America and Asia. A case in point is the economic partnership agreements (EPAs) being literally forced on African, Caribbean and Pacific countries. The agreements seek to bring unprecedented liberalization to these economies. According to the EPAs, African countries are required to wave off tariffs on up to 80% of their imports from Europe (OPPD, 2012). This means that African countries will lose substantial amounts in import duty. We will also lose one of the most potent tools of import regulations meant to protect local industries. In other words, tariffs are no longer going to be used as deterrent to imports, at least those from Europe and local companies would have to compete directly with goods from European countries. Since these goods are largely manufactured goods, this will greatly hamper manufacturing in African countries. According to the sustainability impact assessment by the European Commission, the EPAs could “accelerate the collapse” of the manufacturing sector in West Africa (Friends of the Earth, 2008).

   Moreover, countries that ratify the agreements will have 100% access to European markets for their exports. Of course, everybody knows that the level of industrial production in Africa is little to write home about. Thus, we only export raw materials with little value to Europe over the years. For instance, in 2008, the main exports from West Africa and Central Africa to Europe were mainly raw materials. For West Africa, oil constituted 55%, gas 16%, cocoa 12% and iron 2% and for Central Africa, oil constituted 70%, wood 10%, cocoa 3% and diamonds 3%. The same holds true for the Southern African Development Community (SADC) member states (OPPD, 2012). With particular reference to Ghana, the production of primary products makes up about 85% of merchandise exports (Partel, M. 2007).

   Interestingly, the EU has divided Africa into five blocs for the purposes of the EPAs namely West Africa Region, Southern and Eastern Africa Region, Central Africa Region, East African Community (EAC) and Southern African Development Community (SADC). The West African bloc contains 16 countries, Southern and Eastern Africa (SEA) – 14, Central Africa – 8, East African Community (EAC) – 7 and SADC – 7. Literally, the EU which is made up of 27 member countries is stronger than each of these blocs even by mere numerical considerations. However, if Africa were united, the 54 nation-state will be twice as numerically strong as the EU and will be at an advantage in that regard.  But beyond numerical strength, our power to negotiate would be enhanced enormously if we unite. Although the EU is not a unity government, the union represents all European countries and all members states enjoy the benefits that will result from the EPAs. Also, it has great influence and comprehensive authority on its member states. Alas, same cannot be said about the AU. The lesson here is that our numbers can and should be our source of strength.

   The EPAs are not the first neo-colonialist trade liberalization policies; others have come in the form of the Structural Adjustment Policies (SAPs) in the 1980’s, Economic Recovery Programmes (ERPs), and the Lome Convention spanning from 1979 to 1999. All of these were initiated outside of Africa and did affect Africa very negatively in various ways. Whereas the SAPs resulted in wanton divestiture of state assets for peanuts, the Lome Convention actually led to the decline to ACP share in European imports from about 8% in 1975 to 2.8% in 2000 (OPPD, 2008). The lesson that this teaches us is that we have no development partners; every continent pursues the interests of its countries even if it means heating others to a melting point.

    The above clearly indicate that with the current dispensation of loose unity, Africa still remains largely susceptible to cankerous influence, malicious manipulation and inhumane exploitation. African unity has shown to be every African’s desire, so there is no more time to waste – unity is strength; Africa Must Unite.

REFERENCES

European Parliament, OPPD (2012). Partnership Agreements Eu-Acp: Facts And Key Issues. http://www.europarl.europa.eu/oppd

Friends of the Earth (2008). Undercutting Africa: Economic Partnership Agreements, forests and the European Union’s quest for Africa’s raw materials. www.foe.co.uk

Patel, M. (2007). Economic Partnership Agreements between the EU and African Countries: Potential Development Implications for Ghana

BY

YAKUBU  HARDI

UNIVERSITY OF GHANA, LEGON

0243931165

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6 thoughts on “CLAMPDOWN ON FOREIGN RETAIL BUSINESSES IN GHANA: LESSONS FOR CONTINENTAL UNITY

  1. On point my brother.I swallow all hook line and sinker.The problem Africa is facing is insipid leadership and poverty of ideas.We shall overcome

  2. well researched,
    however,we all cherish the benefits of continental unity but it comes at a cost to each nation. Do the other nations prepared to sacrifise like we are doing? My heart bleeds when i visit some shops in Tamale, the Nigerians are hurriedly taking up th retail sector and the indigens may soon be reduced to beggers. You need to call th law frm shelves when phenomena lyk ths arises; and shll be suspended when all agreed to bear th cost.
    Again, lets not put all our woes on a doctor for given us prescription after a diagnosis we requested for. Economic policies such as SAP,EPA were all geared to solve specific problems; of course there will be spill-over effects, both -ves and *ves. We need to train our experts who can formulate, implement and manage these effects with in-deth knowledge of th enviroment.

    • Issmed, thanks for your insight, Sir. It is not uncertain that these policies were and have been geared toward solving specific problems. However, it appears that all of them no matter the objectives have covertly led us to one unenviable destination; that’s what breeds the condition for suspicion.

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