Ghana’s Retail Sector: Unpacking the Fronting Conundrum

Story by Fada Amakye

Ghana’s Trade Minister, Elizabeth Ofosu-Adjare, has sounded a cautionary note on attempts to restrict foreign involvement in the country’s retail sector, citing numerous challenges that arise when local operators serve merely as fronts for foreign investors.

Speaking at the Government Accountability Series in Accra, the Minister disputed claims that foreigners exercise overwhelming dominance over Ghana’s retail market, describing such assertions as fundamentally inconsistent with the actual dynamics observed on the ground.

According to Ofosu-Adjare, the nation that foreigners dominate 70% of Ghana’s retail market is unfounded, and she cited her firsthand observations from market visits as evidence. “I can say for sure, without any scientific basis, that foreigners are not responsible for 70% of our retail market. I don’t need rocket science; I only need to go to the market to see how many shops are being manned by foreigners,” she stated. The Minister acknowledged the presence of foreign nationals in retail trade but pointed out that many collaborate with Ghanaian citizens, complicating enforcement of existing regulations.

The Minister’s comments highlight the complexities of regulating foreign involvement in Ghana’s retail sector. While the government aims to support local businesses, it also seeks to attract foreign investment. However, the practice of fronting, where locals register businesses for foreign owners, undermines efforts to promote economic independence.

Ofosu-Adjare urged Ghanaians to stop fronting for foreign traders, saying, “Don’t front for them. Let them come with their red face on the retail market, and we’ll do the needful”. She emphasized the need for a balanced approach that supports local businesses while responsibly managing foreign involvement in Ghana’s evolving economic landscape.

The Minister’s stance has sparked debate on the best way to promote local businesses and regulate foreign involvement in Ghana’s retail sector.

As Ghana navigates these complexities, other African nations will be watching closely to see how the country balances its economic interests.