Nigeria and Ghana negotiate special bilateral framework to end trade disputes

The long standing dispute between Ghanaian retail traders and their Nigerian counterparts who have been engaged in retail trading activities in contravention of local investment laws – but allowed under ECOWAS protocols – may be about to be resolved at last.

Similarly, the other trade dispute between the two countries – that of Nigeria disallowing goods from Ghana entry into its markets in blatant contravention of both ECOWAS and AfCFTA protocols is to be resolved as well.

Last week, the Ghanaian and Nigerian governments, agreed to make a special law that would facilitate trade and address the crisis that has lingered between both countries.

Speakers of the Parliament from the two nations Femi Gbajabiamila (Nigeria) and Alban Sumana Bagbin (Ghana) disclosed this during a press conference after a closed-door meeting held in Abuja.

Head of the Ghanaian delegate Bagbin said a consensus had already been reached through a special mechanism that would prevent a recurrence of the conflicts that have occurred between traders from both nations over the past decade.

A special committee comprising selected lawmakers from Ghana and Nigerian is to work in alliance to enact the Ghana-Nigeria Friendship Act.

Through the Act, the joint committee would eventually establish the Ghana-Nigeria Business Council, in a deliberate move to foster good business interaction and friendship between the two countries.

“Rt. Hon. Speaker, I am here just to help bring finality to the impasse” Bagbin assured last week.

“I pledge my commitment and that of the Parliament of Ghana, to contribute in every way possible to end the impasse between traders of our two sister countries. In furtherance of that, under my leadership, the Parliament of Ghana has appointed a seven-member committee as Ghana’s delegation to the Joint Committee of Eminent Persons of our Legislatures. They will interact with their Nigerian counterparts towards passing the ‘Ghana-Nigeria Friendship Act.’

“The Act will set up the proposed ‘Ghana-Nigeria Business Council,’ which is intended to provide the legal and institutional framework to sustain the continued friendship and business interests of our people,” Bagbin said.

According to him, Ghana “got assurance from both sides that the issue of trade dispute will be a thing of the past. We’re now putting up a mechanism to make sure that these issues don’t come up again in the future.”

For years, both nations have been at loggerheads over a controversial clause in the Ghana Investment Promotion Centre (GIPC) Act which mandates foreigners, including the Nigerian traders, to make a US$1 million commitment or a similar value worth of raw materials before being allowed to do business in the country.

The report also examined the trade volume between both nations and the possible implications of the trade crisis if it spiraled out of control. Some Nigerians have been pressing for retaliatory measures against Ghanaians trading in Nigeria.

On the other hand, Ghanaians point to the intermittent closure of Nigeria’s borders to imports, including those from Ghana in blatant contravention of ECOWAS protocols relating to free flow of goods between member nations, duty free. Instructively Ghana does not close its borders to Nigerian goods in similar fashion.

While the Nigerian traders describe the US$1 million minimum business capital as outrageous, the Ghanaian authorities insisted that as a sovereign nation, it had the liberty to create laws that must be obeyed by all foreigners.

However, the situation has become more complicated by the commencement of the African Continental Free Trade Agreement AfCFTA, to which both countries are signatories. Under the agreement Nigeria is disallowed from closing its borders to goods made in fellow member nations. While Nigeria has flouted that provision with regards to its ECOWAS neighbours, such action will become more difficult to defend if all of Africa is being denied entry under AfCFTA protocols.

On the other hand, while AfCFTA protocols do not specifically allow for retail trading by foreigners from fellow member states, Ghana worries that as the administrative headquarters of the continental free market, its refusal to follow an older sub regional protocol (on freedom among ECOWAS nationals to engage in retail trading in fellow member states) will put it in bad light among AfCFTA members from further afield.

To be sure, successive Ghanaian administrations, have been acutely aware that the law, introduced a quarter of a century ago, can create implementation problems but Ghanaian traders, under the umbrella of the Ghana Union of Traders Associations, GUTA, have put intense pressure on government. Instructively, successive governments in Ghana have therefore acceded to the traders requests to enforce the law when general elections are on the horizon, only to allow their foreign counterparts to re-open their shops when the elections are over.

Now however, a permanent solution to the trade disputes between Ghana and Nigeria has become imperative, particularly in the light of their respective reputations as major potential trade and investment counterparties under AfCFTA.

Nigeria’s Gbajabiamila, in his reaction to Bagbin’s assurances, had described the closed-door meeting as successful, saying issues of interest to both nations were discussed.

He said a technical committee was already set up by the lawmakers to perfect the deliberations, and the committee members would be visiting Ghana this week.

“We’ve more or less concluded the roadmap to achieve lasting solutions to the diplomatic issues with our traders.

“The issue with our traders and the Ghanaian authorities has been addressed today. The Minister of Trade and the Minister of State for Foreign Affairs were at the meeting.

“There is a technical committee set up. They will be going to Ghana next week to dot the ‘Is’ and cross the ‘Ts,’” he stated.

Gbajabiamila applauded his Ghanaian counterpart for his resolve to ensure the trading crisis was addressed.

“The issue of the Nigerian embassy in Ghana, the Ghanaian authorities have accepted to take responsibility, though it has nothing to do with them, they said they will put it back.”

“We went beyond Nigeria-Ghana relationship. We also talked about CoSAP. Other issues will be addressed by the two friendship groups,” he added.

Bagbin concluded by asking for the review of the prohibition list banning the importation of specific goods and commodities into the Nigerian market from other countries, including Ghana.

Indeed, this will have to be a major issue to be resolved under the new framework. While Nigeria has been emphasizing the need to protect the rights of its citizens engaging in retail trade in Ghana, it has been avoiding the issue of its illegal prohibition of made in Ghana goods which are even supposed to be allowed in duty free.

Although at some point Nigeria announced a special trade corridor for the import of genuine made in Ghana goods, bureaucracy – and corruption – among its state officials have prevented its efficacious implementation.

Expectedly at this week’s meetings in Accra this will be top of the agenda for Ghanaian officials. Nigeria is a major market for Ghana’s non-traditional exports and Nigeria’s blanket prohibition seriously affects the fortunes of lots of Ghanaian manufacturers.

While Nigeria’s argument is partly tenable – because of the sheer size of its market foreigners from outside the continent use its neighbours as staging posts to repackage their goods, thus presenting them as made in West Africa to give them duty free access to the Nigerian market – in practice there should not be any major difficulties in identifying genuinely made in Ghana goods and consequently allowing them into Nigeria.

State officials, investors, entrepreneurs, diplomats and corporate executives from both countries have been advocating for a special relationship between the two, similar to that between the United States and Great Britain, based on their shared culture and strong economic relations. There is now hope spreading that the impending new framework may set the foundation for formalizing such a special relationship.