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Sub-State Protectionism in Ghana

Document Cited authorities 1 Cited in Related
Vincent
Published date01 March 2010
DOI10.3366/E0954889009000516
Date01 March 2010
AuthorKofi Oteng Kufuor
Pages78-91
INTRODUCTION

Knitted together from a number of administrative units during the colonial era, there has hardly been recorded concern about deliberately constructed tariff or nontariff barriers to the free movement of goods within what is modern-day Ghana.1

Ghana is the product of the Gold Coast Colony, Asante, the Northern Territories and Trans-Volta Togo being merged by the British colonial administration.

The main trade-related concerns are the ability of exporters in Ghana to secure access to overseas markets, and also the need to provide local import-competing interests with shelter from supposedly unfair competition from overseas.2

In recent times there has been a crescendo of petitions for protection in the form of increased tariffs on imports into Ghana. See ‘Ghana: Farmers Look forward to Government Action’ (30 October 2007), available at http://www.freshplaza.com/news detail.asp (last visited 1 June 2008). One recent response to this pressure is the proposed Tariff Advisory Board. See Selorm Amevor, ‘Ghana Government to Establish Tariff Advisory Board’, Public Agenda (21 April 2008) available at http://www.allafrica.com/stories200804211728.html (last visited 1 June 2008); and ‘Farmers demand C3trillion fund from gov't to support agriculture’ (29 October 2007), available at http://www.ghanaian-chronicle.com/thestory (last visited 22 June 2008). Ghana's trade policy does concede some ground to the demands of the agricultural lobbies as a whole. On the one hand, the trade policy underscores the point that markets are crucial for the development and distribution of products for both local consumption and export. However, markets, as the trade policy also stresses, are vital for consumer welfare. Thus, the trade policy calls for the striking of a balance between prices paid to producers of primary products and the prices consumers pay given that both, according to the trade policy, are vulnerable. Thus, while there is the need for a free market system, the trade policy also sees the need for ‘minimum state intervention’ in farm gate prices of strategic products. See Ministry of Trade and Industry, Ghana Trade Policy Ghana, Ministry of Trade and Industry, p. 27. We should note here that appeals for protection under the umbrella of shelter from dumped imports have long been part of Ghana's trade policy. See K. O. Kufuor, ‘The Development of Antidumping Policy and Practice in Ghana from Independence to the Present’, in P. S. Prasad (ed.), Antidumping Laws: Country Perspectives, Ifcai Press (2007), pp. 129–50.

 However, a closer look at transactions within Ghana in what should be a unified market reveals protectionism of the type that supposedly exists only in international trade. Thus, the presumption that once imports into Ghana overcome any border tariff or nontariff barriers they circulate within the country free of any other permissible barriers is not quite correct. As we shall see in this paper, current trends in domestic political economy are such that through the interaction of judicial rulings, local government policy, and central government support, economic operators in Ghana's capital city, Accra, have sought, and continue to seek, protection from low-cost tomatoes from Burkina Faso.3

This plea reflects increased trade tensions within the developing world and the flight into protectionism by the same set of countries. See K. O. Kufuor, ‘The Growing Problem of Intra-Developing Country Anti-Dumping Actions in World Trade’, in B. Debroy and D. Chakraborty (eds), Antidumping: Global Abuse of a Trade Policy Instrument, Academic Foundation & Liberty Institute (2007), pp. 85–100; and K. O. Kufuor, ‘Africa and Antidumping Issues in the Doha Round’, 17 African Journal of International and Comparative Law (2009): 166–76.

In recent times, actors in Ghana's tomato industry, viz. tomato farmers, tomato processing and canning firms, and tomato traders, have been rather grim about their economic prospects. On their part, tomato farmers claim that the industry is under threat from cheap tomato imports from neighbouring Burkina Faso; they further allege that there is a lack of government financial and technical support for tomato farmers and also that there is no ready outlet for locally grown produce. Tomato canning and processing firms have also expressed their reservations about the future viability of the industry. The essence of their disquiet is that they are adversely affected by dumped imported canned tomato paste. For their part, tomato traders have also asserted that they too continue to suffer from the consequences of competing with low-priced tomato imports.4

See K. O. Kufuor, ‘Ban on the Importation of Tomato Paste and Concentrate into Ghana’, 16 African Journal of International and Comparative Law (2008): 100–14.

Bowing to lobbying from the tomato industry, the Ghanaian government has granted support to it in the form of the guaranteed purchase of locally grown tomatoes for processing. The Ghanaian government has also negotiated an agreement between the National Tomato Traders Association and local tomato farmers under which the former are to buy part of their tomatoes from farmers in Ghana's Upper East Region. This commitment was irrespective of the fact that these tomatoes are usually more costly than low-cost Burkina Faso tomatoes.5

Whether this policy has been a success is questionable. As at 2009, the government continues to urge Ghanaian tomato traders to purchase their produce from local farmers instead of from Burkina Faso. See ‘Traders urged to buy tomatoes from Upper East Farmers’ (5 March 2009), available at http://www.ghanaweb.com/GhanaHomePage/News/Archive/artikel.php (last visited 5 March 2009). The situation is obviously rather serious as some tomato farmers have suggested that Ghana close its borders with Burkina Faso during the harvest season so as to prevent traders from importing tomatoes from Burkina Faso, ibid.

Thus to ensure local farmers regular demand for their produce, tomato traders were persuaded to look beyond profits when engaged in commercial activity.6

See C. Lartey, ‘As Police, Farmers, Traders Engage in Tomato War’, Ghanaian Observer (2 March 2007), available at http://www.ghanaianobserver.com/news/newsarticle (last visited 19 October 2007).

 However, local tomato interests have continued to press for greater protection. Therefore in addition to state support at the national level, there has crystallised another degree of support in the form of substate intervention in the tomato trade. In a recent judgement7

Unfortunately, I have not yet been able to get my hands on the transcripts of the case and thus my references to the judgement are based on newspaper reports.

 handed down by the Judicial Sub-Committee (JSC) of the Ga8

The Ga are one of the ethnic groups of Ghana. They are concentrated in Accra, the capital city.

 Traditional Council9

Traditional Councils are statutory bodies with the paramount chief of the traditional area as the head. Traditional Councils as established by customary law are guaranteed under the Constitution of Ghana. See Ghana Fourth Republican Constitution, Article 270 (1). JSCs are provided for under Article 22 (3) of the Chieftaincy Act (1971), Act 370. They exercise the original and appellate jurisdiction conferred on a Regional House of Chiefs under the Chieftaincy Act, ibid. On the Ga Traditional Council, see D.T. Osabu-Kle, Compatible Cultural Democracy: The Key to Development in Africa, Broadview Press (2000), pp. 89–90. For an introduction to chieftaincy in Ghana, see K. Boafo-Arthur, ‘Chieftaincy in Ghana: Challenges and Prospects in the 21st Century’, 2 African and Asian Studies (2003), pp. 125–53; and P. Valsecchi, ‘He Who Sets the Boundary’: Chieftaincy as a ‘Necessary’ Institution in Ghana’ Universita Degli Studi Di Teramo, Faculty of Communication Working Paper No. 3 (2007), available at http://wp.communit.it/data/wp no 3 2007.pdf (last visited 6 June 2008).

 in Accra, a ban on trading in tomatoes in undesignated markets was upheld. The JSC sat in response to allegations that some traders were violating a Trade Ministry-endorsed schedule that compels traders to comply with the established system for offloading tomatoes in markets for onward distribution to retailers. The JSC ruled that the ban was essential as it disciplined traders who brought tomatoes into undesignated markets. Rule-breaking, in the view of the JSC, created what it called an artificial surplus and, consequently, caused losses to traders who continued to operate from designated markets. According to the JSC its ruling was based on the premise that certain activities within the tomato trade had an adverse impact on those traders who operated with loans from banks as they were unable to sell their produce.10

See Accra Daily Mail (19 February 2008), available at http://allafrica.com/stories/200802190415.html (last visited 12 March 2008); and ‘Ghana: Crisis Looms over Tomatoes Importation’ (19 February 2008), available at http://allafrica.com/stories/200802190414.html (last visited 4 December 2008). However, while the demand for fresh tomatoes increased from 220,000 metric tonnes in 2003 to 270,000 metric tonnes in 2008, the country was not able to produce enough to meet local demand, with the production of fresh tomatoes stagnating since 2003. However, this failure, it is alleged, is due to importation of 90,000 metric tonnes of tomato paste and 20,000 metric tonnes of fresh tomatoes. See ‘Demand for Fresh Tomatoes Increases’ (17 February 2008), available at http://dailyguideghana.com/nedd/index.php (last visited 17 February 2009).

The ban reveals a tension between substate interests on the one hand, and government's commitment to trade liberalisation on the other, as the impact of tomatoes imported from Burkina Faso continues to generate demands for protection. While there have been past commitments to trade liberalisation, Ghana seems to have made a greater...

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