Ghana’s retail commerce sector is currently valued at US$24.4 billion and it is projected to hit US$33.16 billion by 2024, according to the recent Global Retail Development Index.
In Africa, Ghana is ranked 1st and has been described as Africa’s new “bright spot” driven by increased foreign & public investment as well as urbanization of the population.
This comes at a time the operational phase of the Africa Continental Free Trade Area (AfCFTA) is about to commence in July this year with Ghana aiming to be both a front runner in the expected surge in intra-African trade, and one of the most preferred destinations on the continent for domestic and foreign investment in both the local production and the import of consumer goods ultimately sold to end users through retail outlets.
The index – which studies the global retailing landscape – ranks Ghana first in Africa and fourth globally as an abundance of small neighborhood shops offering low-income consumers value-for-money goods still dominate the highly fragmented retail market.
The new report’s findings are expected to put Ghana under the spotlight for investors in retail commerce in consumer goods from around Africa and the wider global economy as a whole since it presents Ghana as one of the most vibrant and lucrative markets for sales of consumer goods.
However, Ghana is still sorting out its issues about the eligibility of foreign enterprises to engage in retailing since the existing Ghana Investment Promotion Centre (GIPC) Act, 2013 (Act 865, Section 28) limits such activities in the sector by setting minimum start up capital for foreign owned retailers at US$1 million.
While several major international brands including South Africa’s Shoprite and Game have met this requirement and are very active in Ghana especially in the emergent shopping malls, most foreign retailers from neighbouring African countries are small scale and have failed to meet the required minimum.
Instructively, Ghana Union of Traders Association (GUTA) has been engaging with government to apply the eligibility criteria on foreign traders from the West African sub-region, particularly Nigerians and thus stop most of them from engaging in retailing on the basis of GIPC’s investment code. However, this provision is contrary to ECOWAS protocol to Ghana is a signatory, a situation which retailers from these countries, backed by their respective foreign missions here stand on to continue their activities.
The resultant ongoing impasse between GUTA and Nigerian traders is pushing government to make a decision on whether or not to still stand by its investment code in defiance of the ECOWAS protocol.
Indeed, Goldstreet Business understands that the ongoing review of the GIPC investment code may remove that clause that restricts small scale retail trade exclusively to Ghanaian indigenes.
The new global retail report identifies that urbanization will be a major driver for modern retailing business, as space in department and variety stores is targeted to grow by 15 percent by the end of year 2023.
Currently, retailing in small stalls in open markets still dominates, although independent small grocers are also popular.
Ghana’s growing middle class, comprising discerning and financially empowered retail shoppers is another driving force behind the rapid growth of its retail sales sector
Senegal ranks 7th in the report; Morocco, 12th; Tunisia, 25th; Egypt comes 26th, Tanzania and Nigeria at 28th and 30th respectively.