Policy think tank IMANI Africa has endorsed President John Mahama’s announcement to scrap the $1 million minimum capital requirement for foreign trading companies, describing it as a “bold shift” that could invigorate Ghana’s retail sector and attract new investment.
The requirement, introduced under the Ghana Investment Promotion Centre (GIPC) Act, was intended to protect local traders but has long been criticized as a barrier to smaller foreign investors. IMANI argues that the rule stifled competition, limited consumer choice, and discouraged new entrants into one of Ghana’s most dynamic economic sectors.
“Rather than raising barriers, opening the retail sector could yield significant consumer benefits. More competition would mean greater product variety and downward pressure on prices, ultimately enhancing consumer choice,” IMANI said in its analysis of the policy shift.
The move, however, faces opposition from the Ghana Union of Traders Association (GUTA), which has historically resisted foreign participation in retail. GUTA insists the sector should remain the preserve of Ghanaians, arguing that protecting small traders is critical to safeguarding livelihoods in the informal market.
IMANI countered that this protectionist stance is increasingly misaligned with Ghana’s evolving retail landscape. Rising middle-class incomes, a young tech-savvy population, and the rapid growth of organized retail and e-commerce are reshaping consumer behavior. Global trends show online sales accounted for 20.1% of total retail sales in 2024, a milestone that underscores the digital transformation sweeping through markets, including Africa.
In Ghana, retail is shifting away from open-air markets toward digital platforms and shopping centers, with e-commerce and modern trade expanding rapidly. IMANI argues that lowering barriers to foreign investment could accelerate this shift, bringing in innovation, efficiency, and new capital at a time when Ghana needs to boost growth.
The think tank acknowledged that regulation remains essential, particularly to ensure compliance and consumer protection in online transactions, but stressed that Ghana’s long-term competitiveness depends on creating a more open investment climate.
“President Mahama’s reform, if followed through, could therefore be a catalyst for a more open, dynamic retail market aligned with global trends,” IMANI said.
If implemented, the removal of the $1 million threshold would make Ghana only the second West African country after Nigeria to eliminate capital barriers for foreign traders, potentially giving the retail sector fresh impetus in attracting foreign direct investment.
