Globalisation , China and Ghanaian Entrepreneurs

Near the port in Accra, the Ghanaian government has set up duty-free industrial zones to spur international trade. Hand-painted logos adorn the walls of the warehouse-style buildings, and their large wooden doors open off the loading docks. At lunchtime, women sell hot meals of beans and rice to workers in the shade of the eaves. This is where Nora Bannerman’s factory makes dresses and clothes sold in American department stores and lab coats worn by pharmacists at Walgreens and CVS in the United States.

Bannerman, who has made clothes since she was nine years old, is an icon in Ghana. She wears designer sunglasses as she drives through town in her cobalt-blue Mercedes Benz. She will not reveal her age except to say she was born in the Gold Coast, Ghana’s name before independence. Her fashion design school has trained more than 100 students, and many have since set up their own businesses. Bannerman’s story shows how globalization both helps and hurts Africans in their desire to move ahead.

Easier trade gives Africans access to millions of people with money to spend, and Bannerman’s designs sell in the United States, France, Germany and Switzerland. But it also brings competition, especially from China, which plays a growing role in Africa. China imports raw materials from all over Africa, such as Ghana’s timber and minerals. In 2005 Ghana’s trade with China increased 35 percent to $816 million, making China its top trading partner. And China is investing – it loaned Ghana $30 million to build a national fiber optic network.

Yet China also floods the world with goods so cheap that Africans can’t compete. Bannerman says Chinese companies mass-produce, without permission, her designs and traditional African fabrics at prices below her cost of production.

 

China has been going all over Africa, picking out the good ideas,” says Bannerman, sitting in her factory office. “While we were still doing high-value, hand-woven kente cloth, China came out with kente prints that are selling well to the United States.

Bannerman says her American buyers constantly pressure her to cut prices. But she won’t and can’t cut wages – the U.S. African Growth and Opportunity Act requires African exporters to meet human rights standards that do not apply to China, because of international trade rules.

Bannerman also has to pay high taxes on all imported cloth and thread that further raise her costs to export. And she competes within Africa against second-hand clothes from international donors that are not taxed. She says all she and other African business people need to succeed is a fair playing field. “We don’t want a situation where we are asking for aid all of the time,” she says.

Africa has a long history of international trade. The 1st century gold coins of the royal families of Axum, in present-day Ethiopia, have been found as far away as India. Yet the continent today accounts for only 4 percent of global trade. On the roads in almost every town, small-scale entrepreneurs balance on their heads everything from vegetables and ice cream to DVD players and television aerials as they sell to drivers stuck in traffic. But most of those goods come from overseas – $273 million left the continent in 2005.

Capital inflow to some African countries, including Ghana, is now rising. And so is hope. This year’s study by the Pew Global Attitudes Project found that despite crushing poverty, majorities in nine out of 10 African countries surveyed believe their lives will be better five years from now. Surveys in 12 African countries from 1999 to 2006 by the Afrobarometer Network, an independent research group, also found growing optimism.

Asmah says Africans can and will work hard to succeed, and he is trying to spread the wealth in his country. He supports a business plan competition that gives advice to 60 promising entrepreneurs and helps them build contacts, in partnership with business promoter TechnoServe and Google.org, the Internet company’s philanthropic arm. The top 20 winners get a jump start in their new enterprise.

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