Ghana-Nigeria trade war: What you should know about the law

There’s been a seeming tension in the trade industry in recent times due to misunderstanding between Ghanaian traders and foreigners on their legality to engage in retail businesses in Ghana.

There have been reports of closure of retail shops owned by foreigners by a task force put together by the Trade Ministry. The Public Relations Officer of the ministry had said it is against the laws of Ghana for foreigners to own retail shops in the country.

In this report, GhanaWeb throws light on laws that govern both the investment and trading activities in the county.

About the Ghana Investment Promotion Centre (GIPC) law Act 2013 (Act 865).

This legal framework is to encourage and promote investments in Ghana by providing an enabling environment for investors. But some businesses, per the law, are not to be owned by foreigners, neither are they to be seen engaged in it. Amongst such businesses include, the sale of goods in a market, selling of goods in a stall at any place, operating a beauty salon or a barbering shop, engaging in the retail of finished pharmaceutical products among others.

However, foreigners may be given the go ahead to operate in a trading enterprise only if they invest not less than US$ 1,000,000 in cash or via goods and services relevant to the investments.

Also, they are required to employ at least 20 skilled Ghanaians at their workplace based on Section 28 (4) of Act 865.

Foreigners who engage in retail trade without meeting the minimum capital requirements mentioned above commits an offence which is against the GIPC law.

Ghanaians or non-Ghanaians who also let out a stall in a market to a foreigner also commit a breach of Act 865 and is equally punishable by law.

About the ECOWAS protocol law.

Chapter II Article (3) of the Revised Treaty of ECOWAS stipulates the removal of trade barriers and harmonisation of trade policies for the establishment of a Free Trade Area, a Customs Union, a Common Market and an eventual culmination into a Monetary and Economic Union in West Africa.

The ECOWAS Protocol ensures the free mobility of the community citizens. Based on this, most foreigners are seen in other African countries, of which Ghana is of no exception.

But in Ghana, the GIPC law clashes with the ECOWAS protocol and this has created a barrier between Ghanaian traders and foreigners.