ACCRA, Ghana (IPS/GIN) - Business has been slow for many Ghanaian traders, who blame the situation on corruption and insufficient legal protection, as well as on an influx of cheap Chinese products.
The concern about the Chinese expansion in business circles was illustrated by the convening of a roundtable discussion in November that looked at ways to protect small industries against the intrusion of Chinese products.
IPS visited the central business district of the capital of Accra to hear local traders’ views on the effects of Chinese goods on their businesses.
Philip Asobonteng, 45, has operated a shop in Accra for more than 20 years. He said, “We have no problem with competition but, if it is coming to destroy you, there is a need to speak up.”
Last year traders closed their shops to protest against what they regard as unfair competition. However, this elicited no response from the government. After all, the Chinese traders are not breaking any law.
The country’s investment code stipulates that any foreigner investing a minimum of $300,000 can open a retail business. In addition to that, the business must employ 10 Ghanaians.
Any foreigner who meets these requirements can legally start her or his own business. But, Mr. Asobonteng said, some Chinese traders “are using the laws to create hurdles for us, and we want the government to take a stand.”
The Ghana Union of Traders sent a proposal to parliament in November last year urging members of parliament to review the investment code. They claimed that the code had not been reviewed since being enacted 13-years-ago.
According to the union, the minimum investment amount should be raised to $1 million and the number of Ghanaians to be employed increased to 25. In addition, the commodity categories should also be reviewed. Ghana Union of Traders executive member Joseph Addy claimed that foreigners, including Chinese traders, were abusing the law.
The Association of Ghana Industries has insisted that a partnership with China should be a win-win situation, arguing, “We need a measured approach to protect our interests in the trade relationship with China and other developed countries.” Many traders agree with this view.
William Afflu, a seller of household products, said some Chinese traders “are using tricks to get around the law. They break the law in a very clever way, and no one can take them to task.”
Mr. Addy had told the roundtable conference last year that some foreign traders registered as free-zone companies but then imported goods to sell on the Ghanaian market. Free-zone companies are given government incentives to manufacture and process goods inside Ghana.
Other foreigners use the pretext of exporting goods to neighboring landlocked countries to divert goods to the Ghanaian market without paying the necessary taxes, which makes these goods cheaper.
In order to fight off the threats posed to local commercial interests, the Ghana Investment Promotion Center, along with the customs and excise services, immigration services and the police, set up a task force last year to arrest those foreign traders who were abusing the law.
Unfortunately this intervention has not been sustained. One reason is the collaboration of some Ghanaians with foreign traders to flout the law. Mr. Afflu said he knew Ghanaians who had approached foreigners, especially Chinese, to “front” for them so they don’t have to meet the criteria for foreign businesspeople.
“These are things you see. You know what has gone on, but the paperwork tells a different story. In the event of this happening, what can you do?” Mr. Afflu said.
This development poses a difficult problem: How can business partnerships between Chinese and Ghanaians be checked? Meanwhile the government’s trade with China is on the rise.
Joseph Henry Mensah, a senior cabinet minister and chairperson of the National Development Planning Commission, does not regard China’s increasing presence in Ghana as a threat to the country. Rather, he sees it as providing trade opportunities which the country should take advantage of for the benefit of all.
“We are all spending time to fight a threat from China when actually there is none,” Mr. Mensah said.
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