Foreign retailers in Ghana: Illegal under GIPC Act 1994, (Act 478) and Act 2013 (Act 865)

Many Ghanaians have espoused that the influx of foreign retailers in the market is a threat to indigenous business and that, the ramifications of such influx is a collapse of local businesses.

This call by most Ghanaians is perceived to be a mere necessary evil but, I want to state unequivocally that it is a constitutional freedom for local retailers to remain uncompetitive with foreign traders in the area of retail.

Under the Ghana Investment Promotion Centre Act 1994, (Act 478) and Act 2013 (Act 865), certain enterprises are reserved for Ghanaians and it is an offence for foreigners to participate in those specified enterprises.

Section 27(1) of the GIPC Act 2013 (Act 865) states that “A person who is not a citizen or an enterprise which is not wholly owned by citizen shall not invest or participate in-

a) the sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place;

b) the operation of taxi or car hire service in an enterprise that has a fleet of less than twenty-five vehicles;

c) the operation of a beauty salon or a barber shop;

d) the printing of recharge scratch cards for the use of subscribers of telecommunication services;

e) the production of exercise books and other basic stationery;

f) the retail of finished pharmaceutical products;

g) the production, supply and retail of sachet water;

h) all aspects of pool betting business and lotteries, except football pool”.

In respect of the operation of taxis however, a foreigner may undertake this service provided he has a minimum fleet of ten new vehicles. Section 19 of Act 478 also makes certain exceptions.

The GIPC Act 1994 (478) in Section 19(2a) states that where there is a joint enterprise with a Ghanaian partner, the foreigner must contribute foreign capital of not less than US$10,000.00 or its equivalent worth in capital goods by way of equity participation.

In continuation from the above, where the enterprise is wholly owned by a non-Ghanaian, there is an investment of foreign capital of not less than US$50,000.00 or its equivalent worth in capital goods by way of equity capital according to Section 19(2b) of the GIPC Act 1994 (478).

Additionally in section 19(3), where the enterprise sought to be operated by the foreigner involves only the purchasing and selling of goods which is either wholly or partly owned by a foreigner, that foreigner is to invest foreign capital of at least US$300,000.00 by way of equity capital and the foreigner is to employ at least 10 Ghanaians.

More importantly, there is the need for every foreigner who intends to establish any enterprise falling under Act 478 is required to register the enterprise under the Companies Act, 1963, Act 179.

A foreigner is also required to register his enterprise after registration under the Companies Act 1963, Act 179 with the Centre. Under the law, the Centre is mandated to register the enterprise within five(5) working days after receipt of the completed registration forms where it is satisfied that all relevant documents for registration are in order and that the minimum foreign equity capital requirement has been complied with.

The Centre provides such assistance and guidance as maybe required and acts as liaison between the enterprise and relevant government departments, agencies and other public authorities.

It is noteworthy that every foreigner who complies with the registration is entitled to incentives as are applicable to such enterprise under the Income Tax Decree 1975 (SMCD 5) and under Chapters 82, 84, 85 and 98 of the Customs Harmonised Commodity and Tariff Code scheduled to the Customs, Excise and Preventive Service Law, 1993 (PNDCL 330) and any other law for the time being in force. More so any foreigner investing in Ghana is entitled to unconditional transferability of its dividends, profits and trade capital. The law also safeguards against expropriation by the government.

Any dispute arising between a foreign investor and the Government is subject to mutual discussion to reach amicable settlement. In the alternative, the law makes provision for arbitration in accordance with the rules of procedure for arbitration of the United Nations Commission of International Trade Law.

Foreign investor should note that in the event where there is a dispute as to the method of settlement to be adopted, that of the investor shall prevail.

It is of this elucidation that Ghanaian traders must stand for their right and demand the immediate closure of all retailed shops owned by foreigners in the country.

The constitutional right of Ghanaian traders and retailers must be protected now to save the economy of Ghana