Wholesaling and retailing activities shape both Ghana’s economy and our daily lives. Consumers and businesses patronise products and services every day, according to needs and preferences, from beautifully merchandised outlets and marketplaces so conveniently located with value-for-money goods.
Our familiarity with shopping, however, often leads us to take the retail and wholesale sectors for granted; hence the failure to fully integrate the sector into Ghana’s economic development programmes. The sector significantly contributes in terms of industrial development, competitiveness, economic added value, employment, innovations and trade.
Technological progress and consumer behaviour are at the heart of a profound transformation within retail and wholesale. The growth of online trading is changing the way businesses operate and consumers interact, generating new challenges and opportunities.
Our recent industry profiling and business indexing projects show wholesale and retail are potentially high performers in terms of business growth, value, sustainability, resilience, return on equity, asset turnover and net margins, and are undoubtedly engines of growth and employment critical to the future of Ghana’s economic development and prosperity (See Table 2 below).
Ghana ranked first in Africa and fourth in the world in the 2019 Retail Development Index, with a retail sector valued in the order of US$24.4bn and projected to increase to US$33.16bn by 2024 (Ghanaian Times, January 2019). The report suggests an increase of approximately 15% in shopping store spaces per year.
Table 1: Global Retail Development Index (RDI) and Internet Speed Index (ISI)
| Country | RDI Rank | ISI Rank |
| China | 1 | |
| India | 2 | |
| Ghana | 4 | 79 |
| South Africa | 85 | |
| Senegal | 7 | |
| Morocco | 12 | |
| Tunisia | 25 | |
| Egypt | 26 | 91 |
| Tanzania | 28 | |
| Nigeria | 30 |
Source: Time, 2019
Ghana is roped into the fast Internet lane, but has not fully taken advantage to expand and formalise the wholesale and retail sector of Ghana-made products and services. Online retailers have different behavioural patterns in different countries, and in Ghana, informal retailing dominates with the abundance of small neighbourhood convenience shops providing short floor consumers with value-for-money fast-moving goods. The market is nevertheless fragmented, even though the sector’s landscape is changing with better organised small stalls and grocers taking shape.
Ghana’s retail and wholesale power of domestic goods requires well-fashioned policy innovation to fully integrate the sector into the country’s economic development agenda. New investments and budgetary allocations are needed to recruit local entrepreneurs into the wholesale and retail sector to structure stylised merchandise of value-added Ghana-made products in the semblance of Shoprite, Game, Palace, Koala, Melcom, Pick & Pay and Massmart Holdings.
Timely policy innovations are needed to push the trading agenda of local products to another level to benefit from the retail development power the country is enjoying among global players. This requires policymakers and stakeholders to acquire and implement the following suggested insights:
- Deep grasp of high impact Ghana-made products and services
- Better understanding of the wholesale and retail sector
- Better understanding of commerce, wholesale, retail and distributive trade
- Retail and wholesale capabilities
- Contribution to trade and added value
- Contribution to industrial and manufacturing sustainability
- Supply chain structures and strategies
- Logistics investments
- Wholesale and retail infrastructure update
- Trade metrics
- Investments in communities and stylised stalls and merchandise for wholesale and retail to thrive
- Understanding the contribution of retail and wholesale to the economy, and the rich diversity of commerce in Ghana
- Contribution of the sector to employment
- Multiplier effects (hidden and obvious)
- Contribution to the tax net
- Competitiveness in relation to regional and the wider AfCFTA players
- Online and digital players and consumer to consumer (C2C) trading
- Business to Business (B2B) trading
- Ecommerce impact
- A good profile of the Ghanaian consumer
Retail and wholesale are very significant and dynamic contributors to the Ghanaian economy and must be profoundly transformed to include Ghana-made stylised shelving to take advantage of the country’s retail performance, which hitherto was mostly merchandise of imported goods.
The sectors offer great potential for future industrialisation, improved manufacturing, job and wealth creation, as well as major benefits for consumers, traders, logistics and transport investors.
Budgetary allocations and policy innovations must aim at providing wholesale and retail structures and a better understanding that will contribute to public policy decision-making to provide an environment in which retailers and wholesalers of Ghana-made goods can evolve and thrive, compete and innovate for the benefit of consumers. Policy interventions must include, but are not limited to, the following:
- Media collaborations to lift the image of Ghana-made goods
- Demographic fusing of age, regions and consumer differences
- Crafting a fit-for-future operating model for Ghanaian retail and wholesale entrepreneurs
- End-to-end supply chain strategies
- Developing and managing the retail and wholesale skill shift for the right talent and reskilling
- Revise and adopt more agile, omnichannel operating models for wholesalers and retailers in Ghana-made goods
- Invest in retail and wholesale structural shifts that capture the full value at stake
- Invest in smart automation technologies for Ghana-made goods for retailers to capture the hearts of the youth
The performance of wholesale and retail sectors among other industries (apart from the global index positions) in Ghana indicates the need for sterner attention to policy innovation, investment and strategic restructuring to fully capture the industry’s economic multiplier effects.
Table 2: Wholesale and Retail Performance Scores and Selected Industry Profiles in Ghana
| Industry | Growth | Value | Resilience | Stability | Quality | ROE | ATO | GM | ROA |
| Wholesale and Retail | 0.07 | -0,01 | -0.07 | 0.03 | -0.06 | 0.578 | 3.806 | 0.362 | 0.056 |
| Pharmaceutical | 0.02 | -0.16 | -0.01 | -0.10 | -0.04 | 2.857 | 0.538 | 0.296 | |
| Banking and Finance | 0.34 | 0.48 | 0.04 | 0.06 | -0.17 | 0.327 | 1.288 | 0.721 | 0.064 |
| Agribusiness | 0.04 | 0.07 | -0.07 | 0.05 | -0.37 | 0.5486 | 2.476 | 0.291 | 2.093 |
| Construction | 0.30 | -0.15 | -0.06 | 0.05 | 0.07 | 0.678 | 3.770 | 0.472 | 0.163 |
| Mining | -0.24 | 26.32 | -0.11 | -0.12 | -0.82 | 0.374 | 1.152 | 0.479 | 0.153 |
| Professional Services | 0.08 | -0.16 | 0.12 | -0.11 | 0.25 | 0.177 | 3.003 | 0.634 | 0.417 |
| Education | 0.01 | -0.16 | 0.36 | -0.10 | 1.35 | 0.539 | 1.592 | 0.867 | 0.539 |
Source: GNCCI 2020. S’bility = Sustainability Score. ROE = Return on Equity = EBITDA/Equity. ATO = Asset Turnover. NM = Net Margin = EBITDA/Sales
Going forward, a lot more must be done to optimise the sector’s performance – through prudent planning, structuring, and public budgeting – to fully capture its distributive and multiplier capacity and contribution to the nation’s economy. Intuitively, the imperatives are price and value to the African consumer – but peculiarly important for Ghanaians, and more so for fast-moving goods.
Most Ghanaians will choose price over luxurious shopping experience, but a mix of the two (price and shopping experience) can be structured to mobilise and integrate more Ghanaians and Ghana-made goods into a consumer experience that will formalise the wholesale and retail sector.
This will go a long way in adding to Ghana’s natural economic development capable of chugging along with sustainable industrialisation, employment and resilient trading. More initiatives and innovations are needed to change the perception of Ghanaians about Ghana-made goods, through effective conscientisation policies, shopping experiences, branding and optimal pricing.
The writer is the CEO of Afrideg Ghana Limited
