Nigerians have been doing business in Ghana for years. It was perfectly legal, and an absolute entitlement under the Economic Community of West African States (ECOWAS) Protocol.
Excerpts from the protocol affording rights to member citizens:
Article 3d) of the protocol: the establishment of a common market through: i) the liberalization of trade by the abolition, among Member States, of customs duties levied on imports and exports, and the abolition among Member States, of non-tariff barriers in order to establish a free trade area at the Community level; ii) the adoption of a common external tariff and a common trade policy vis-à-vis third countries; iii) the removal, between Member States, of obstacles to the free movement of persons, goods, service and capital, and to the right of residence and establishment; e) the establishment of an economic union through the adoption of common policies in the economic, financial social and cultural sectors, and the creation of a monetary union…. and …
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
3i) the harmonization of national investment codes leading to the adoption of a single Community investment code;
So what went wrong?
Well, it all started with an organization called ‘The Ghana Union of Traders Association (GUTA)’ , looking to leverage a Ghanaian law brought out in 2013 called the Ghana Investment Promotion Centre Act (GIPC) 2013 (Act 865)
Subsection (2) of this law states:
‘A person who is not a citizen may engage in a trading enterprise if that person invests in the enterprise, not less than one million United States dollars in cash or goods and services relevant to the investments.
An enterprise referred to in subsection (2) shall employ at least twenty skilled Ghanaians’
The problem is, that the law was never intended to target individuals or companies from the ECOWAS community and was conceived to protect the Ghana local market, and its businesspeople, from exploitation by distant nations, particularly non-African.
However the wording of the Act was not sufficiently well defined, and this notionally criminalizes any non-Ghanaian, even ECOWAS citizens such as Nigerians, from operating in Ghana without bringing in the required capital, and/or failing to employ the required minimum of locals.
Initially, Ghanaian authorities more or less ignored the law when they saw the obvious disconnect, in respect to ECOWAS citizens in Ghana.
It is a global phenomenon that Police and other agencies with enforcement powers, are not obliged to prosecute each and every infringement they discover. They are entrusted by the nation they serve with the entitlement to exercise discretion.
There is a law in many countries called ‘jaywalking’, which is crossing a road on foot, without due care and attention, and in a manner that puts both oneself and other road users at risk. However, while road-crossing in an unsafe manner is quite common, it rarely gets prosecuted.
It is required of Police and Enforcement Agencies to use their experience and specialist skills with public engagement to understand infringement context, recognize mitigating circumstances and see gaps between what is on statute and what works on ground.
This is critical in their shepherding of the public in the adherence to laws.
However, as Nigerian small-medium businesses in Ghana began to give indigenes competition, conflicts began to appear. This was mostly in traditional market environments with businesses operating from converted container freight units, kiosks, and small ‘lock-up’ shops.
Then GUTA began supporting its members to drive Nigerians out of their businesses quoting the law.
In August of last year, The General Secretary of the All Nigerian Community, Mr Isaac Osahon Ekhator, said some members of the association were contemplating leaving behind their goods and move back to Nigeria because of the difficulties they were facing following the closure of their shops.
He expressed surprise that their government did not seem concerned about their plight in Ghana and pointed out that if it were to be in another country, their government would come to their aid.
“On behalf of citizens of Nigeria in Ghana, we appeal to the Federal Republic of Nigeria to urgently consider this burning issue and promptly intervene to bring hope and lessen the plight of her citizens,” Mr Ekhator stated.
Nigeria responded by closing borders.
Parallel to this however, we have had the ongoing progress of AfCFTA taking various twists and turns.
In March 2018, President Muhammadu Buhari requested a committee to review the AfCFTA’s text, saying ‘continental aspirations must complement Nigeria’s national interests’ and this especially means not permitting Nigeria to become ‘a dumping ground for finished goods’.
This followed on Nigeria’s refusal to sign the ECOWAS-EU Economic Partnership Agreement, and opposing Morocco’s ascension to the union at the end of 2017.
This is Nigeria’s current playbook – to consolidate its economic power in West Africa through domestic market protectionism.
However, the second biggest market on the Continent, South Africa, has also backpedalled somewhat on AfCFTA.
My own concerns on AfCFTA are well noted, not on the principle which I broadly support, but on confines and boundaries being properly set up, so that it results in benefiting the member nations as intended, rather than loosening control measures regulating non-member actors to member markets.
I have been particularly vocal on the automotive sector.
https://www.linkedin.com/embed/feed/update/urn:li:share:6735258973328470016
‘GHANA – THE NEW BACKDOOR INTO NIGERIA FOR FOREIGN VEHICLE MANUFACTURERS’
Fast forward to the present, and a new report a few days ago by BALARABE ALKASSIM for News Express
‘The Ghanaian Speaker, Alban Kingsford Sumana, says his country has raised a seven-man committee as its delegation to the Joint Committee of Eminent Persons of Legislature between it and Nigeria to end trade disputes and other issues’
They will interact with their Nigerian counterparts towards passing the “Ghana-Nigeria Friendship Act”, which is intended to be a bi-national trade agreement. The Act will then pass into both Ghanaian and Nigerian Law.
The act is also offering to mitigate Nigerians against the requirements of GIPC Act 2013 (Act 865)
This happened speaking to House of Rep. in Abuja just Wednesday.
But you have to ask the obvious question…
If the #2 powerhouse in ECOWAS has to approach the #1 ECOWAS (and African) powerhouse for a bi-national trade agreement…
Doesn’t this leave AfCFTA looking rather toothless?
References and Acknowledgements (Not in main body text):
Ghanaian GIPC Act: gipc.gov.gh/wp-content/uploads/2020/08/GHANA-INVESTMENT-PROMOTION-CENTRE-GIPC-ACT-865.pdf
https://www.peacefmonline.com/pages/comment/features/202008/425647.php
thenationonlineng.net/one-million-dollars-levy-is-xenophobia-in-disguise-say-nigerian-traders-in-ghana
www.linkedin.com/posts/ndubuisi-ekekwe-36068210_the-ghanas-great-disintermediation-playbook-activity-6817047127974305792-kNMh
Revised ECOWAS Agreement: www3.nd.edu/~ggoertz/rei/rei260/rei260.23tt1.pdf
South Africa, Nigeria and the AfCFTA : www.africaportal.org/features/south-africa-nigeria-and-afcfta-6-key-questions-answered/
newsexpressngr.com/news/127704-Ghana-raises-cttee-with-Nigeria-to-end-trade-disputes
The only problem I see here is that those who draft laws, those who read them, and those who pass them, are not at the same level.
The group that write will write plenty things, the group that read barely understand the nuances of what they are reading, and the group that pass? They cannot read at all, let alone when it’s lengthy documents.
Solve that problem, and all the confusions will disappear.