Trade War Between Nigeria and Ghana Escalates Over New Investment Laws

Nigerians traders in Ghana have been protesting discriminatory treatment for months.

Nigerian President Muhammadu Buhari met with Ghananian President Nana Akufo-Addo in a closed-door meeting at Aso Rock in Abuja, Nigeria on September 21. The meeting sought to soothe escalating tensions arising from trade disputes between the two West African countries. Nigerian traders and retail workers residing in Ghana have been protesting anti-Nigerian discrimination in the country since the beginning of the summer. 

As members of the Economic Community of West African States (ECOWAS), Nigeria and Ghana have enjoyed a close trade partnership. Ghana accounts for 17.2 percent of Nigeria’s exports, making it Abuja’s largest trading partner. 

However, diplomatic relations between the ECOWAS members have historically been tense. In 1969, Ghana issued the Aliens Compliance order, leading to the deportation of Nigerian immigrants and “mark[ing] the onset of expulsions of Nigerians from Ghana,” according to an analysis by the Edward Ulzen Memorial Foundation. 

Likewise, in 1983, former Nigerian President Shehu Shagari issued an executive order that mandated the deportation of two million undocumented immigrants, half of whom were Ghananian. 

In 2019, Buhari closed Nigeria’s land borders indefinitely in an attempt to quell the illegal smuggling of goods across the border. The closure negatively impacted Ghananian manufacturers by driving up prices. 

Recently, tensions reached a peak after the shooting of a Nigerian man in Kasoa by a Ghanaian police officer and the destruction of the Nigerian Embassy in Accra, Ghana. These acts incited protests from the Nigerian community in Ghana. 

Akufo-Addo is now pushing for the adoption of Ghana Investment Promotion Center (GIPC) laws, which prohibit foreign retailers from doing business in Ghana until they invest at least $1 million and employ 20 locals. This minimum capital requirement has led to the closure of foreign retailers throughout Ghana.

Critics have argued that the laws disproportionately target Nigerian businesses. However, the Vice President of the Ghana Union of Traders argued that the law had historical precedent. Additionally, Chief Executive of GIPC, Yofi Grant, attributed the mass closure of Nigerian businesses to COVID-19 rather than the new law. 

Meanwhile, Nigerian retailers have taken to the streets, forming picket lines to protest the trade legislation. 

According to business analyst Louis Afful, these disagreements over GIPC laws could have major implications for the future of the African Continental Free Trade Agreement, which reduces trade restrictions among a number of African states. Nigeria has yet to ratify the agreement, partly because of the ongoing trade war with Ghana. 

The meeting between Buhari and Akufo-Addo may significantly alter the future of Ghana-Nigerian relations. The precise details of the meeting remain undisclosed. 

The meeting follows Nigerian Vice President Yemi Osinbajo’s conversation with Nigerian traders on September 16. The traders had protested the earlier demolition of the Nigerian commission in Ghana in June, as well as the closure of foreign businesses by the Ghananian government.

"I will certainly convey the depth of your grievances to the President. I am sure that he will be deeply disturbed to hear that despite the assurances that he had received from the Ghanaian government, there are still problems and complications,” Osinbajo said at the meeting.

The Vice President also stated that diplomatic efforts have been made between Nigeria and Ghana in response to the protests, alluding to the meeting between Akufo-Addo and Buhari. "What we need to do aggressively is to follow-up with the Ghanaian government and to see that these things are done," he said.

Meanwhile, Ghana’s government has claimed that Nigeria’s efforts to shut down the border represents an attack on Ghananian traders.