The Hostility Against Nigerian businesses in Ghana, Explained by Neusroom’s Michael Orodare
Nigerians doing business in Ghana are currently locked in a bitter row with the government and Ghanaian traders over a myriad of issues ranging from the enforcement of a trade policy mandating all foreign businesses in Ghana to pay $1 million registration fee and allegations of hostility against Nigerian nationals.
The dispute has seen Nigerians in Ghana accuse the authorities of deliberately imposing the heavy registration fee of a million dollar to frustrate Nigerian business owners out of the country.
Just like in South Africa, Nigerians have long been accused by Ghanaians of dominating businesses and taking over retail trades that are reserved for only their citizens. The only difference is that it has not resulted in xenophobic attacks like South Africa.
From several videos circulating on social media, Ghanaian authorities were seen locking shops belonging to Nigerians, inside Tip Toe Lane, Accra, the capital city. In the videos, Nigerian traders accused the Ghanaian government of trade xenophobia while their hosts have also justified their actions.
What appears to have started as a cold war has degenerated into a fierce debate that could lead to diplomatic rows between the two countries, but it didn’t start in 2020. We trace the history of the crisis.
Although the Chairman of Nigeria Union of Traders Ghana Association, Chief Kizito said the crisis started in 2007 and the Economic Community of West African States (ECOWAS) and the Nigerian government were briefed, it became a major crisis in September 2018 when more than 400 businesses owned by Nigerians were closed by Ghanaian authorities following an eviction order dated July 27, 2018, demanding that they must have $1m as minimum foreign investment capital to do business in Ghana. This sparked a protest by shop owners who accused the Ghanaian Parliament of passing a legislation to make the business environment hostile to foreign investors.
On November 1, 2019, the Ghana Union of Traders’ Association (GUTA), raided five markets in Kumasi where they shut down shops belonging to Nigerians. Two weeks later, on November 12, 2019, the union also stormed the Opera Square in Accra to shut down 15 shops owned by Nigerians, bringing the total number of Nigerian-owned businesses shut down by GUTA to 70. The clampdown was said to be in retaliation to the closure of Nigerian borders by the Nigerian government in August 2019.
The Regional Secretary of GUTA, David Amoateng, had urged Ghanaians to boycott Nigerian goods as a counteraction to the border closure by the Nigerian government. It took the intervention of the Ghanaian government before the crisis was resolved.
Like an annual event, the crisis reared its ugly head again in August 2020 when an inter-ministerial task force went round on August 10 to identify shops owned by Nigerian traders and requested for registration of business taxes, resident permit, standard control and Ghana Investment Promotion Council (GIPC) registration which costs $1m, according to the President of Nigerian Traders Union in Ghana, Chukwuemeka Nnaji.
Nnaji said the traders were given a 14-day ultimatum to pay the $1m or face eviction by August 24 which has now elapsed.
Ghanaians Justify Clampdown
Justifying the clampdown, officials of GUTA said in November 2019 that Nigerian traders and shop owners flouted the Ghanaian law by operating businesses exclusively meant for citizens.
They backed their claim with Section 27 of the Ghana Investment Promotion Centre (GIPC) Act 865, which bars foreigners from sale of goods, provision of services in a market, petty trading or hawking or selling goods in a shop.
Other activities not permitted for non-citizens according to the Act include:
- Operation of taxi or car hire service in an enterprise that has a fleet of less than twenty-five vehicles.
- Operation of a beauty salon or a barber’s shop.
- Printing of recharge scratch cards for the use of subscribers of telecommunication services.
- Production of exercise books and other basic stationery.
- Retail of finished pharmaceutical products.
- Production and retail of sachet water.
Section 28(2) of the Act, however, states that: “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…and such enterprise must employ at least 20 skilled Ghanaians.”
Their position was corroborated by the Head of Communications, Ghana Ministry of Trade, Prince Boakye Boateng who said that the government shutdown Nigerian businesses because they didn’t comply with the provision of the law after the ultimatum given to them elapsed.
He added that the laws of the country reserve Retail Trading to Ghanaians
He listed the requirements foreigners must meet before doing business in the country as follows:
- Register the business with the relevant department of the business entity.
- Prove that the company pays taxes.
- The company must be certified by Ghana Standards authority to know if the goods imported into the country meet up with the right standard
- The company must prove that it has invested $1m in the business activities.
“The incidence that has occurred where some shops were locked up must have risen out of situations where there were clear abuses of the application of the laws,” Ghanaian Minister of Trade and Industry Alan Kyerematen told Speaker of the Nigerian House of Representatives, Femi Gbajabiamila who visited Ghana on Wednesday September 2, 2020.
However, the Ghanaian Minister of Information, Kojo Nkrumah, in a response to a statement by his Nigerian counterpart, Lai Mohammed, said the issues between both countries will be resolved through diplomacy.
What Nigerians in Ghana are saying:
Nigerian business owners in Ghana are refusing to pay the $1m registration fee over claims that the ECOWAS protocol on free movement of goods and persons across the sub-region allows them to trade and do any kind of business in Ghana.
A Nigerian trader in Accra, Francis Onisa, complained in a viral video that he had obtained all his business permits since 2007 and wondered why the Ghanaian authorities were compelling him to pay $1m before re-opening his shops in Accra.
The President, Nigerian Traders Union in Ghana, Chukwuemeka Nnaji, has said if the issue is not resolved, “Nigeria should go to court to get an interpretation. But it’s like when you take your landlord to court, you will eventually leave the property, whether you win or lose.”
What has the Nigerian government done?
The Minister of Foreign Affairs, Geoffrey Onyeama, on Tuesday August 18, said the federal government may be forced to sue the Ghanaian government at the ECOWAS Court of Justice if the country was found to have breached the sub-region’s protocol of free movement of peoples.
Speaker of the House of Representatives, Femi Gbajabiamila, visited Ghana on Wednesday September 2 where he had a ‘Legislative Diplomacy’ bilateral meeting with Ghanaian lawmakers, Minister of Trade and Industry, Alan Kyerematen and other top government officials as part of a move to resolve the crisis.
Gbajabiamila advocated for an amicable settlement of trade disputes through arbitration and fair judicial processes.
“While it is the sovereign right of the government of Ghana to pass and implement the GIPC Act, we would implore you to explore alternative and less aggressive options of engaging, sanctioning and relating with our traders and business people who operate in your country, pay taxes and contribute to the development of both our nations,” Gbajabiamila told Ghanaian lawmakers.
He added: “we would encourage you to revisit the component of the law that requires a capital base of $1,000,000. We are all Africans, we all have towns and villages, and we know only too well that the majority of our traders across the continent are petty traders.”
The outcome of the meeting is yet to be made public as promised by the Speaker.
What may happen next?
With the lingering crisis which is likely to cause a major trade war between Nigeria and Ghana, many Nigerian pundits have commended the Ghanaian government for making moves to protect the business of its citizens just as the Nigerian government ordered the closure of borders in August 2019 as part of efforts to boost local rice production and other businesses and encourage Nigerians to patronise them.
If the Nigerian government makes good its threat to drag Ghana before the ECOWAS court, pundits said it may worsen the fraught diplomatic ties between the two West African countries.
