Ghana and Nigeria′s historic spat flares | Africa | DW | 01.09.2020
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Trade war

Ghana and Nigeria's historic spat flares

The two West African nations have been at loggerheads over trade for decades, without serious consequences. That could change now that the region is in the grip of the COVID-19 pandemic and several deep political crises.

The intensifying diplomatic row came to a head in recent days, with Abuja and Accra trading insults and grievances over the alleged mistreatment of Nigerian nationals in Ghana.

"Nigerians who have been doing business in Ghana have been harassed. Their shops are being closed, with all sorts of molestation and intimidation," Ken Ukoha, president of the National Association of Nigerian Traders, told DW.

Ghanaian authorities deny that Nigerian traders are being specifically targeted. Some 700 Nigerians who were recently deported were allegedly involved in criminal activities, they said.

But Ghana's Foreign Minister, Shirley Ayorkor Botchwey, hinted at what could be at the root of the current tiff, when she blamed Nigerian policies for hurting Ghanaian businesses: "August 2019 saw Nigeria close its land borders without notice to community trade," she said, alluding to the partial closure of borders with Benin, Niger and Cameroon.

Read more: Ghanaian traders livid at Nigeria border closure

Border disputes

At the time, Abuja explained that the aim of the measure was to protect local industries from goods being smuggled into the country.

"But it was also very much perceived as a means of the Nigerian government preventing the import of goods from these countries to allow domestic producers of rice and other staple foods to be able to be more competitive," said Ryan Cummings, director for the South Africa-based consultancy, Signal Risk. The aim was to stimulate local production and consumption of Nigerian goods.

Presidents Nana Akufo-Addo of Ghana and Muhammadu Buhari of Nigeria

Presidents Nana Akufo-Addo of Ghana (left) and Muhammadu Buhari of Nigeria, do not see eye to eye on trade issues

Nigerians like former ambassador Suleiman Dahiru argue that "Nigeria and Ghana share no borders. So what has Ghana to do with the closure of our borders?," he asked.

"Obviously it had an impact," expert Cummings told DW. "ECOWAS [Economic Community of West African States], for instance, mentioned that Nigeria's trade policies were contrary to the framework of the regional block," and that they had consequences also for countries not immediately affected by the ban. Ghana was one of them.

Cummings pointed out that Nigerian President Muhammadu Buhari came into power in 2015 on a policies platform "driven by economic nationalism and very protectionist." Serious economic problems resulting from two current major crises: the COVID-19 pandemic and nosediving oil prices did nothing to mitigate his protectionist tendencies.

Read more: No end in sight to Nigeria's border closures 

Widespread protectionism

Nigeria doesn't have a monopoly on protectionism. Ghana has its own laws that clash directly with the so-called ECOWAS' protocol, which ensures the free movement of community citizens, as well as free and fair trade.

A case in point is the 2013 Ghana Investment Promotion Centre Act (GIPC), that bars foreigners from retail trade, including the sale of goods or provision of services in a market or anywhere else, as well as from operating taxis, beauty salons or barber shops, among other measures.

An exception is made for a noncitizen able to invest at least $1 million (€834,745) in their own enterprise, something not many Nigerians are able to finance.

"We are going to get in touch with ECOWAS," Nigerian Foreign Minister Geoffrey Onyeama said. "Once we have the facts, then we will consider all our options." 

The organization will hardly want to mediate between the two regional economic powerhouses. "ECOWAS has demonstrated a real hesitancy to impact on how a country is operating from an economic perspective, in terms of laws and regulations," expert Ryan Cummings said. "It is highly unlikely at this stage that ECOWAS will exert any pressure on the Ghanaian or even on the Nigerian government."

ECOWAS has repeatedly criticized Abuja for its continuing embargo against products from neighboring countries, but without taking any "punitive measures against the Buhari government."

Elections in Ghana

Ghanaian President Nana Akufo-Addo had originally struck a conciliatory tone, condemning hostilities between Ghanaian and Nigerian traders and calling for talks with Abuja. In January he said: "Trade issues, the border and our own internal problems with the Nigerians involved in Ghanaian retail business; these are matters that friends should be able to sit down and resolve."

Two people looking at the flame spurting from an oil well (picture-alliance/dpa)

A protracted slump of oil prices has added to the Nigerian economy's problems

Now, a couple of months later, the tone has become much less friendly. The recent flare-up of the traditional trade rivalry "has to be seen in the light of forthcoming elections," in Ghana on December 7, expert Cummings said. The incumbent administration of Nana Akufo-Addo will want to appear strong "both from a foreign policy and also domestic perspective" in a "context where all countries are trying to shield their respective populations from the impact of the coronavirus pandemic," he added.

Cooperation is the key to recovery 

Traditional competitiveness between Ghana and Nigeria has never had any significant negative political or economic repercussions for the region. But current circumstances might change that. In view of the COVID-19 pandemic "any form of economic recovery, especially in West Africa, will require greater cohesion between member states to increase intra-bloc trade," Cummings said.

Add to that the challenges that ECOWAS is facing at the moment, including a coup in Mali, fraught elections coming up in Ivory Coast and Guinea, and political insecurity in Guinea-Bissau. Not only will ECOWAS have little time and energy to waste on a relatively minor ongoing dispute between two major members. It is also dependent on major members' support to help solve the crises which already have a huge impact on the region, and threaten to make problems worse. "Countries as powerful as Ghana and Nigeria need to be sitting at the same table and focus more on cooperation, as opposed to antagonism," Cummings said.