The Head of the Economics Department at the University of Professional Studies, Accra (UPSA), Professor Abdullah Mumuni, has warned that the rapid expansion of shopping malls—particularly foreign-owned ones—could undermine local manufacturing unless the government mandates that they source a quota of products locally.

Speaking exclusively to Business and Financial Times (B&FT), Prof Mumuni urged government to leverage the growth of foreign-owned malls to strengthen domestic production. He recommended that a compulsory local sourcing quota would stimulate manufacturing, boost economic growth, and create jobs.

He further suggested that government could assist mall operators with the capacity to establish factories in Ghana to produce goods locally.

“We should push for them to establish industries here and produce locally. They can start with their plants and everything,” Prof Mumuni advised.

The economist noted that local production would not only generate jobs and revenue but also strengthen the cedi by reducing the pressure of import-driven foreign exchange demand and contribute significantly to the country’s GDP.

“It takes time for all these things. So if they start with 30 to 40 percent, they can increase the quota over time,” he added.

Currently, many foreign-owned malls import most of their products, leaving local manufacturers uncompetitive due to high domestic production costs. Prof Mumuni said this import-driven model depletes foreign currency and hinders the growth of the local industry.

“This situates Ghana in a dilemma of sacrificing local economies on the altar of a more formalised and taxable form that has the potential to create a lot of jobs,” he explained.

He emphasised that high production costs are forcing local producers out of the market. “Our prices generally are not competitive. It’s not because of quality, but generally the price level. Our unit cost locally is normally high,” Prof Mumuni said.

He described the cost problem as systemic, requiring deliberate policy interventions to improve the overall business environment. “It is woven into the very fabric of doing business in Ghana, fuelled by crippling expenses for electricity, taxes, water, rent, and transportation,” he noted.

According to Prof Mumuni, this has created a market where even basic goods such as toothpicks and snacks are often more profitable to import than to produce locally. “They import Shito. They import toothpicks. It’s not that we cannot produce them here. It’s because we are not able to compete,” he said.

The economist also questioned the rationale behind the influx of foreign retailers, particularly from China, despite low income levels in Ghana. He said factors such as political stability, cheap labour, and market size are the main drivers of foreign investment, rather than a rapidly expanding middle class.

“Investors are looking at national income data. GDP per capita will serve as a guide,” he explained. He added that Ghana’s relatively stable and peaceful consumer base, along with a high youth unemployment rate that guarantees cheap labour, makes the market attractive to foreign firms.

Prof Mumuni further criticised government policy, describing the business environment as punitive for compliant operators while enabling widespread evasion. He cited recent increases in electricity and water tariffs as examples that inflate operational costs, making local products less competitive.

Despite these challenges, Prof Mumuni said traditional markets like Makola are not facing extinction due to enduring consumer segments that value local goods. However, he warned: “If you are not ready to bring down your price, you will be out-competed from the market.”