The Ghana Union of Traders Associations (GUTA) has told the government to enact regulations that will offer them a level playing ground with foreign businesses if protectionism is not the way to go.
The union was reacting to comments by CEO of the Ghana Investment Promotion Centre, Yofi Grant that he would opt for incentives rather than protectionism for local businesses.
In fact, Yofi Grant has hinted that the provision that grants locals exclusive right to retail trade will be struck out of the GIPC Act, 2013, which is under review.
Benjamin Yeboah, an executive member of GUTA, told the B&FT that local business persons are inundated with challenges that are not common to many foreigners who invest in the economy, hence, the need for government to devise innovative policies that will help the locals
“Let me even talk as a business man in Ghana. First and foremost, the playing ground is not level. We have a currency that is not that strong. Secondly, I am struggling with high interest rate that is around 30 percent and beyond, compared to a foreign investor who may come with capital where interest on his loans may be around 2 percent. Right from that level, I am in trouble. I cannot compete with such a person.
So, there should always be a way of holding unto the Ghanaian business person for him to grow. Incentives are good but they must come together with other ways of supporting. So, it is not necessarily protecting but finding some regulations that will support the indigenes to grow,†he said.
He further stated that focus should be given to building the capacities of indigenous businesses to the point where the economy will be owned by them before inviting foreign investors to come and pump in more capital.
“Again, most countries give some protections to their industries and businesses. Why do they do that? They feel it is important to do so, so that that they can grow their economies with their own people, and the foreign investors will only come in to inject the needed capital and add value to their raw materials so that, together, they grow as a country.
But immediately we open our doors for everyone to enter without regulations, to ensure that we grow our indigenes, then when are we going to attain the economic empowerment that we are striving for?†he asked.
Mr. Yeboah is not the only one who has bemoaned the fact that the playing field is not level. The CEO of the Private Enterprise Federation, Nana Osei Bonsu, has also told the B&FT that foreign investors must be made to partner local firms before they are given some tax exemptions or rebates, considering the troubles local businesses go through.
“It is a matter of how we do business that puts us at a disadvantaged position by the kind of support that is provided to others but not to us. For example, a foreign hotel chain coming to establish in Ghana gets funding at three percent from its home country. And its Ghanaian counterpart hotel gets funding at 30 percent. So, you see the disadvantage?
What we are proposing is that any foreign direct investors coming in should be linked to partner some local businesses in case they are looking for tax exemptions. If they are coming at the advantage of getting tax exemptions then they should be required to partner some Ghanaian counterparts.
You cannot do transfer of technology when you are a solo industry; you have to partner somebody before you transfer, so those are the areas that we have to insist that Ghanaian partnership have to go,†Nana Osei Bonsu said.
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Source: Business & Financial Times Ghana