Ghana’s $1m trade levy on foreign traders

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Hostility towards Nigerians is becoming a recurring theme in Ghana’s economic playbook. Shops belonging to foreign nationals, who are largely Nigerians, have been closed by the local authorities and the Ghana Union of Traders Associations. Though this has been provoking angry reactions in Nigeria, the leadership of the Nigerian Traders Union in Ghana says it is an experience they have endured for so long,  dating back to 2007, but resurfacing at regular intervals. The two countries must maintain friendly relations and mutual understanding to the greatest extent possible.

In confirmation, the NTUG President, Chukwuemeka Nnaji, said, “In 2018, the government of Ghana issued us with an eviction order from the markets. Our ambassador intervened and asked them where they wanted us to go. After some time, they suspended the eviction order. Since then, the local traders have taken it upon themselves to start closing our shops indiscriminately.” Thus, over 600 shops belonging to Nigerians were closed last December for months before the recent harassment. In the latest tipping point, the traders have been told to pay $1 million as the foreign equity/capital base for the Ghana Investment Promotion Council registration and were given 14 days within which to comply.

Beyond this, the authorities have expressly stated that by their law, retail trading is reserved for Ghanaian citizens only. Though they claim that the law applies to all foreigners, the majority of foreign nationals engaged in this line of business are Nigerians. Nigerian traders in the country said the authorities had made it clear to them that they must engage only in wholesale trade, employ as many as 25 Ghanaians and move to the city outskirts, leaving the markets for Ghanaians.

This recent harassment came about two months after some non-state actors destroyed a set of buildings under construction at the Nigeria High Commission in Accra, the capital. The residential quarters for the High Commission’s staff and visiting diplomats were pulled down by bulldozers based on the Osu Traditional Stool’s claim of ownership of the parcel of land. The Ghanaian government later apologised and promised to reconstruct the demolished building but hardly waited for the dust to settle before the harassment of Nigerian traders resumed.

Often called sister nations, it is ironic that the two West African countries have experienced frequent breakdowns in their diplomatic relationship. There are echoes of strained relations of 1969-70 and 1980 between them. At the height of the Nigerian Civil War, Nigerians were deported from Ghana; Nigeria returned the disfavour in 1983 in what became known as the “Ghana Must Go” episode.

However, the timing of Ghana’s recent economic decisions has made many to question its motives. When Nigeria, arguably Africa’s largest economy and the most prosperous of the 15-member Economic Community of West African States, closed its borders last August to prevent the smuggling of drugs, small arms and agricultural products, especially rice, the move was criticised by its neighbours and others who felt it would discourage regional integration. The borders have remained closed for a year now, leading some analysts to find a nexus between Nigeria’s border closure and Ghana’s tightening of economic noose around Nigerian businesses in its country.

Whatever reasons may be behind it, it must be said that it is against the ECOWAS protocols. For instance, paragraph 1 of article 59, chapter IX of the revised ECOWAS Treaty states, “Citizens of the Community shall have the right of entry, residence and establishment and member states undertake to recognise these rights of Community citizens in their territories in accordance with the provisions of the protocols relating thereto;” paragraph 2 states, “Member states undertake to adopt all appropriate measures to ensure that Community citizens enjoy fully the rights referred to in paragraph 1 of this article.” Incidentally, Ghana was one of the first nations to ratify the African Continental Free Trade Area agreement, which seeks to create a single continental market for goods and services, with free movement of business, persons and investments, among other objectives, when it becomes operational from January 1, 2021. With member-states in disrespect of such agreements, then the fate of AfCFTA has been decided even before it has a chance to kick off. Obviously, there is no point in ratifying treaties and being members of economic communities is if states will end up making laws that conflict with the agreements signed.

This situation in Ghana is a poignant reminder of the experiences of Nigerians around the world, particularly the xenophobia in South Africa. It has triggered in many Nigerians nostalgia for the past, a time when Nigeria earned more respect internationally. Nigeria’s run of bad leadership has ensured a growing push among its youths for pastures new. And with this has come a feeling of animosity by host communities towards Nigerians; some due to the economic threats posed by industrious Nigerians, some due to the fraudulent activities of bad eggs among Nigerian immigrants and some due to both. In all of this, Nigeria’s Ministry of Foreign Affairs has lacked the courage and expertise required to effectively discharge its duties.

However, this is an opportunity for Nigeria to rethink its foreign policy, a wake-up call to strengthen its diplomacy, internal security, economy and international relations. It is widely recognised that foreign and domestic issues are now powerfully joined. Nigeria’s foreign policy should be seen to be doing what it is expected to do and achieving its goals.

The Nigerian authorities should begin to pay more attention to economic developments at home towards achieving strong foreign policy objectives.

The ECOWAS members should recognise the value of working together. They should strive harder to improve regional integration through increased intra-regional trade and policy coordination. This will help the region’s small-sized economies build greater resilience and scale, as well as enhance their bargaining power on the global stage. Ghana and Nigeria, quite naturally, share a similar sense of values and wide-ranging interests. The Ghana trade levy imbroglio should therefore be resolved diplomatically between the two countries. Meanwhile, ECOWAS needs to step in before the situation degenerates. It should study how successful regional unions around the world like the European Union have achieved their objectives and adopt pragmatic strategies that can work for the sub-region.

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