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21.08.2020 Feature Article

Why Closure Of Nigeria Retail Shops In Ghana

Why Closure Of Nigeria Retail Shops In Ghana
LISTEN AUG 21, 2020

The Minister of Foreign Affairs and Regional Integration, Ms Shirley Ayorkor Botchway said on Wednesday 19 August 2020 that Ghana was enforcing its local trade laws that prohibit foreigners from retailing certain items in the Ghanaian market and enforcing the threshold of capital required to set up,a trading business in Ghana.

The move by the Ghanaian Government was in response to the recent agitations and closure of Nigerian retail shops in Accra and Kumasi by Ghana Traders' Association as their plea to Ghanaian government to restrict Nigerian traders in Ghana had fallen on deaf ears. But it’s election time and the government has to act according to the dictates of its citizens.

Democracy, we say, is the government of the people, by the people and for the people. So if any democratic government says, “Yentie Obiaa” (We would not listen to anybody) to its citizens, that government is in for trouble during election time. The Government of New Patriotic Party listens to the citizens, so it acts according to the voice of the citizens.

But what brought the whole issue which has compelled the Ghanaian traders to cry to their government to restrict Nigerian retail trade in Ghana? Ghanaian traders know that they also retail in Nigeria, so what would compel them to fight Nigerian retail traders in Ghana?

Nigeria has since August 2019 closed her borders to trade across the ECOWAS Subregion resulting in restriction of traders from Ghana to access Nigeria’s huge market. Since the closure of Nigerian borders to trade across the Subregion, Ghanaian traders have lost a huge size of trade and have to contend with the little market in Ghana.

This has compelled Ghanian traders to force the government of Ghana to restrict Nigerians from retailing in the little market left for them in Ghana in apparent reaction to protect the little market volume. Who would allow you to close your huge market and at the same complete with them for their little market?

Nigerian has the largest market size in Africa with 200 million market volume compared to Ghana’s 30 million market volume. Since the middle of October 2019 Nigeria has officially closed its western borders to all goods from the ECOWAS Subregion, especially goods from Benin, Togo and Ghana. Several trucks of goods to and from Ghana have stocked at the Nigerian border at a huge loss to the Ghanaian traders.

The official announcement by the head of the Nigeria’s customs agency said on Monday 14 October 2019 that Nigeria had closed its land borders to all movement of goods and had no timeline for reopening them.

"All goods, for now, are banned from being exported or imported through our land borders and that is to ensure that we have total control over what comes in," Hameed Ali, comptroller-general of the Nigerian Customs Service told reporters in Abuja on Monday 14 October 2019.

President Muhammadu Buhari had in August, two and a half months earlier, ordered the closure of Nigeria's borders to imported goods declaring that the time had come to end rampant smuggling across the porous frontiers. The closure devastatingly effected Benin, Nigeria's neighbour to the west, which is a key exporter of foodstuffs to Africa's most populous country.

During the UK-Africa Investment Summit held in London on 20 January 2020, the President of Ghana, Nana Addo Danquah Akufo-Addo pleaded with President Muhammadu Buhari, the President of Nigeria to reopen the closed borders because of its major effect on Ghana’s economy in a bilateral meeting.

President Buhari, in response, said in a statement issued by the Special Adviser to the President on Media and Publicity, Femi Adesina, that the closure of Nigerian’s borders was not carried out only because of the smuggling of food products, particularly rice but also because of the smuggling of arms and ammunition into the country. He said that there was no way he could watch the lives of youths being destroyed with his eyes opened as the security of the country is of utmost concern.

“When most of the vehicles carrying rice and other food products through our land borders are intercepted, you find cheap hard drugs, and small arms, under the food products. This has terrible consequences for any country,” Buhari said.

He added that the opening of the borders would not happen until the final report of a committee set up on the matter was submitted and considered. Meanwhile, the Federal government had disclosed that the reopening of the country’s land borders would be based on strict compliance with the Economic Community of West Africa States (ECOWAS) regional trade protocol agreements.

But according to Mariam Katagum, Minister of State for Industry, Trade and Investment, the opening of the borders would depend largely on the recommendations from the patrol team set up to monitor compliance with trade protocols. The patrol team comprises relevant security agencies in an exercise codenamed, Operation Exercise Swift Response.

Closing a border of a country because the government wants to control smuggling of food and arms across its borders and protect local industries is not ideal policy of a government, it is a thoughtless policy by any government of a country.

If a country has to protect its borders from smuggling and illicit businesses across its borders, it requires an efficient custom and excise officers at its land, sea and air borders, and not closure of the borders. If the government has to protect local industries, it bans imports, or increases import duties or raise imports regulations and tariffs, it does not close its borders.

The closure of Nigerian western borders has a great impact of Ghanaian traders. They criticised Abuja's decision to continue shutting its border as needless and un-African. On the contrary, Nigeria continues to claim that the border closure has spurred local production and reduced arms smuggling.

Gabriel Nartey, a 50-year old Accra-based car spare parts dealer complained that he had not seen business this bad. "I am stuck, I am losing customers because I don't have what they need," Nartey told Deutche Welle (DW) a German English News Agency in an interview. "I don't know what to do, it's just a few who can go to China, which is more expensive that can manage, but for those like us who rely on Nigeria only, it is challenging for us."

At the initial stages of the border closure, Ghanaian traders did not worry, until six months later. The Ghanaian traders initially downplayed the move hoping that they could cope with the momentary interruption. "Right from the word go, we were not worried about the border closure," Clement Boateng, National Organizer of Ghana's Union of Traders Association, told DW. "It is Nigeria's right, but what we thought was not right was Nigeria's refusal to give prior notice to its ECOWAS citizens," Boateng said.

Over a year now, Abuja has shown no interest in re-opening its border. President Buhari raised hopes that goods would start flowing in and out by January 31 this year. But Nigeria's Comptroller-General Hameed Ali immediately issued a statement that it was no longer the case: "Certainly not the end of January. When we initially closed the border, we intended to get our neighbors to adhere to the ECOWAS protocol on transit goods," Ali told DW in an interview.

Nigeria says that after it closed the border, it has reaped more good than bad. "We discovered that our economy is completely bastardized because we Nigerians have not learned to consume what we produce. And therefore, our industries are not able to produce and enhance their production," Nigeria's top customs official, Ali, said.

"What we are trying to do now by this border closure is to get Nigerians to consume what we produce and produce what we consume because that's the only way that our economy would grow."

Ali's sentiment is shared by many Nigerians who have long complained that other ECOWAS member states have been taking advantage of the regional body's free trade and movement agreement to dump illegal and sub-standard goods in Nigeria.

Rice farmers had taken the government to task over what they called cheap imported imports that were making their way into the Nigerian market via Benin. Peter Dama, Chairman, Rice Millers Association of Nigeria, (RIMAN), boasted to DW about the positive impact of the closed border. "It has raised our production because we have markets now," Dama said.

"The mills are operating, we had dead mills that were not operating before, but now you find that everywhere mills are coming up. We are producing trying our best to feed the nation."

According to Ali, Nigeria's local poultry industry has been given a boost following the border closure. "Our big hotels in Nigeria used to buy eggs from Ghana. With the border closure, we have compelled them to buy the eggs from our [Nigerian] poultry farmers," Ali proudly said. "They are now expanding. An economy that does not have an industrial base can never claim to be an economy."

This protectionism is not only against the ECOWAS Protocol on Trade among member states, it's going to kill trade across the Subregion and affect Nigerian traders in y6w Subregion as well, as many of the ECOWAS membee states would a,so restrict trade from Nigeria. The Nigerians may say that they have enough big market size to suffer, but in every trade war each counrty suffer no matter the market sizes.

Ghana's economy does not depend on Nigerian market. According to the United Nations COMTRADE data base on international trade, Ghanaian imports from Nigeria has dwindled from $850 million in 2011 to $100 million by August 2019. Nigerian imports from Ghana has been a neglectable amount.

As the biggest market in Africa, Nigeria's neighbours look towards it as a huge market for their locally produced goods. But unfortunately, access the market of the West African Subregion has been hampered by adverse protectionist policies that exist among these West African neighbours. The Secretariat of African Continental Free Trade Area (AfCTA), which happens to be headquartered in Accra, has a great work at hand,

GHANA IS CAUGHT BETWEEN A ROCK AND A HARD SURFACE
The Ghanaian traders have no option, but to also restrict the Nigerian traders from taking over their little market. Ghana's President Nana Akuffo-Addo had acknowledged the need for Nigeria to protect its citizens but, at the same time, pleaded with his Nigerian counterpart to consider re-opening the border. He noted that Nigeria was essential for specific categories of businesspeople in Ghana.

Ghana Traders Association are pressing the President of Ghana to do more than just diplomacy. "Nigeria has shown us that when it comes to ECOWAS protocols, they don't care because they put their citizens first," Boateng said. "That is why we think our Ghanaian government needs to implement some of the local laws that can protect the local people, especially regarding the influx of foreigners in the retail trade."

Boateng said the closure is not affecting only Ghanaian traders. "A lot of Nigerians have businesses here in Ghana, and since the closure, they have also spoken bitterly against their government." He said they had been forced to be creative to deal with the current situation. "We can't tell those who trade in Nigeria to sit down and fold their hands, we have to find alternative means, and we have been able to find so many places where we can get the goods from."

Many Nigerians such as Peter Dama would rather see the border kept shut: "As far as I am concerned, it [ the border closure] can be forever," Dama said. "This is because it will stimulate the economy, it will help the nation to become self-sufficient, and it will help us to create jobs," Dama added.

Dama and other officials argue that by keeping the border closed, all the security challenges that the country has had with arms smuggling in particularly can now be effectively dealt with. However, Clement Boateng of Ghana Traders Association, said a similar move with Ghana closing its borders in retaliation would be counter-productive.

“There is no need for Ghana to close its borders. Ghana does not share a border with Nigeria. We share a border with Togo, Burkina Faso, and Ivory Coast, and they are not the ones that have shut down their borders," Boateng said. "It is not necessary, and it is not something that I would encourage the government to do. It is needless."

Gabriel Nartey, the Accra-based Ghanaian car spare parts shipowner, said his customer base had shrunk sine the Nigerian border closure. His frustration was evident; his finger of blame remained squarely on Buhari. "It is rather unfortunate for Africa and not just for Ghana because Nigeria is the center for the market at the moment," Nartey said. "Such a thing would not move Africa forward. Young people are trying to make a living to make Africa move forward. For all, I know it is not helping business at all."

Edward Bamfo-Darko
Edward Bamfo-Darko, © 2020

The author has 31 publications published on Modern Ghana.Column: EdwardBamfoDarko

Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not necessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

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