The Economic Community of West African States (ECOWAS) Protocol allows free movement of persons, goods and services within the sub-region. But, events in the sub-region, particularly the xenophobic attacks on Nigerian traders and businesses and the persecution of member-nations in Ghana, have provoked anger. These, analysts believe, have brought the protocol under threat. Assistant Editor OKWY IROEGBU-CHIKEZIE reports.
Although members of the Economic Community of West African States (ECOWAS) use three languages: English, French and Portuguese as their lingua franca, there are well over a thousand other languages in the sub-region. They include cross-border native languages, such as Hausa, Fulfide, Yoruba, Wolof and Ga. Interestingly, the region’s lingua-cultural diversities present opportunities and challenges in equal measure.
It was against this backdrop that the ECOWAS Protocol was initiated to foster interstate economic and political cooperation among member nations. And all seemed well until recently when the Ghanaian government was accused by Nigerian traders and businesses in Ghana of xenophobic attacks. Some of them said they have suffered incalculable maltreatment in the hands of their host. President, Nigeria Union of Traders’ Association (NUTAG), Ghana, Chief Chukwuemeka Levi Nnaji, is one of them.
At an event tagged: Stakeholders Forum on ECOWAS Trade, organised by the Lagos Chamber of Commerce & Industry (LCCI), Nnaji said though the rules of ECOWAS engagement was clear, the Ghanaian government flouted it by using GIPC Acts 865, 2013.
He said Section 27 (1a) of the Act states that: “A person, who is not a citizen or an enterprise, which is not wholly owned by a citizen, shall not invest or participate in the sale of goods or provision of services in a market, petty trading, hawking or selling of goods in a stall at any place.”
Nnaji argued that this is contrary to ECOWAS Protocol, which states that citizens of ECOWAS shall have the same condition as the citizens of their host country in relation to registration of businesses and payment of taxes.
He accused the Government of Ghana of using the GIPC Act to infringe on the rights of other ECOWAS citizens in Ghana, whereas Ghanaian citizens have continued to enjoy unhindered privileges conferred on ECOWAS citizens all over ECOWAS states, such as Nigeria, Togo, Benin, Gambia and others.
Nnaji recalled how Nigerians have been suffering harassment under various Ghanaian administrations since 2007, when they were mandated to move away from any market where there are two or more Ghanaian shops. He further stated that Nigerian businessmen were made to part with $5,000 and $300 as registration and processing fees.
The NUTAG president said after complying with the alleged xenophobic directives of the government, the Ghana Union of Traders’ Association (GUTA) forcefully closed their shops and attacked Nigerian traders, especially in the Ashanti region out of envy, asking them to leave their country.
He also alleged that they have been denied Residence Permit, as the government allegedly insisted that they must register a limited liability company as they have been stopped from registering sole proprietorship with other hidden charges running into thousands of dollars.
Nnaji said: “Getting a Residence Permit is more difficult than getting USA Green Card. The condition is that you must register a limited liability company.
“If you don’t give a Ghanaian not less than 10 per cent share, which he will not actually pay because he is doing you a favour, then you must pay $500 for work permit before you are issued a Residence Permit. Again, you must obtain a non-citizen identity (ID) Card of $120 and renew same with $60 every year.”
But the Ghana Minister, Counsellor Trade & Investment, Mr. Sintim Barimah Asare, denied the xenophobic complaints by Nigerian traders. Rather, he accused them of selling fake drugs in the shops closed. He said his country has a law, which prohibits foreigners from what he called “Table Top” businesses reserved for poor Ghanaians.
He said other nationals were affected, not Nigerians alone. He also denied the closing of over 400 shops belonging to Nigerians, insisting that only 117 shops were closed down due to non-compliance with work permit, company registration and trading in fake products.
Asare, however, said the Ghanaian Government has ordered the shops opened, but some Nigerian shop owners refused to open in solidarity with their members, who are law breakers. He said though his country believes in the spirit of ECOWAS Protocol, his government owes Ghanaian citizens the duty of protection against aggressive neighbours.
A member of Nigeria/Ghana Business Council, Mrs. Abiola K. Ogunbiyi, questioned the ECOWAS integration policy, noting that it has not lived up to its billings. She said the Protocol has been disregarded.
Mrs Ogunbiyi observed that trade is a relationship of trust. According to her, the protocol treaty presupposes that “we understand each other in terms of business and informal trade”.
She encouraged member nations to create awareness to avoid the kind of altercation between Nigeria and Ghana traders, where the Ghanaian Government was accused of maltreating Nigerians.
She accused ECOWAS states of failing in the area of genuine interaction among themselves. She wondered why Chinese traders did not get the same treatment as their West African counterparts, noting that Chinese Government has found a way to make Ghana a tourist destination.
She said the Chinese came to Ghana 25 years ago, targeting the tourism sector and it worked for them. He, however, regretted that ECOWAS citizens did not have such affinity and so this might have caused the altercation between Nigerian and Ghanaian traders.
But Mrs Ogunbiyi’s position was stoutly debunked by NUTGA Secretary-General Evaristus Nwankwo, who insisted that the shops closed were not drug shops, but motor parts shops. He questioned why the so-called fake drug dealers were not apprehended and sent to jail until now.
Nwankwo said some of them remained closed due to their refusal to pay 200 cedis, which is about N15,000 for what they called “breaking of key”.
He wondered how a key used by a trade organisation such as GUTA to illegally lock shops owned by Nigerians can cost that much. He, therefore, called on Nigerian Government to either force its Ghanaian counterpart to play by the rules or retaliate as many Ghanaian businesses operate in Nigeria.
According to him, the ECOWAS Protocol has been relegated to the background, as the interaction, free trade and affinity proposed by the founders have been sacrificed.
Another stakeholder, Sir Pantaleon Ogbonna Ezena, said his shop was locked up even after paying his income tax and Pay as You Earn (PAYE). He also disproved what the Ghanaian diplomat said about Nigerians engaging in illegal and fake drugs business.
He said he deals on science equipment and not drugs and motor parts. According to him, their host government does not want to see them succeed in business and is using all tactics to frustrate them out of Ghana.
Ezena recalled how he invited his Ghanaian friends and neighbours to his home town, but noted that the gesture was never reciprocated by them as they see Nigerians as ambitious and aggressive.
He called on the Nigerian Government to address the situation before it escalates in the sub-region. Although he agreed that other ECOWAS citizens were affected by the maltreatment by Ghanaians, the targets, he said, were Nigerians, because at a point their shops were vandalised and burnt.
Ezena disclosed that most of them have been sent out of business and had no choice, but to either return to Nigeria or send their families back while they wait for the government’s intervention. He advised Nigerian Government to treat the situation with the doctrine of reciprocity to send a message to Accra.
The President, Lagos Chambers of Commerce and Industry (LCCI), Mr. Babatunde Paul Ruwase, said in these days of growing forces of globalisation, individualistic disposition and outlook may not be sustainable.
Ruwase advised that recent developments in the European Union (EU) marked by Brexit and the protectionist stance of the United States (US) do not detract from the immense benefits and value of economic integration.
He said with a robust market of over 386 million people, significant benefits of economies of scale would be enjoyed by businesses in the ECOWAS sub-region in the event of full market integration.
Ruwase said: “This would lower unit costs and enhance competitiveness. Integration is, in fact, the main vehicle for boosting trade within the sub-region. With integration, our economies would be stronger and their capacity to cope with the challenges of globalisation would be enhanced.”
He regretted that some member countries have put in place domestic policies, which negate the spirit of economic integration.
He said: “There are also numerous institutional and infrastructural problems militating against the lofty objectives of ECOWAS.
“We, therefore, need to tackle the current frustrating barriers to trade in the sub-region. The trade treaties are not being fully implemented. Compliance levels are very low and commitment to the trade protocols is very weak. After 43 years of ECOWAS, we are still grappling with numerous tariff and non-tariff barriers to trade.”
Ruwase pledged that the Chamber would continue to focus on the recent experiences of Nigerian traders in Ghana, within the larger context of the economic integration objectives of ECOWAS.
As a result of the poor posture of ECOWAS countries on the protocol, stakeholders have called on the government to be mindful of other protocols they sign, such as the New Partnership for Africa’s Development (NEPAD) and the Economic Partnership Agreement (EPA).
For instance, NEPAD was adopted by the African Union (AU) in 2002 as the primary mechanism to coordinate the pace and impact of Africa’s development in the 21st Century.
Its primary objective was to provide a new mechanism, spearheaded by African leaders, to eradicate poverty and place African countries, individually and collectively, on a path of sustainable growth and development.
According to stakeholders, it was also made to halt the marginalisation of Africa in the globalisation process, accelerate the empowerment of women and fully integrate Africa into the global economy.
NEPAD evolved from three initiatives designed to address the complex challenges to growth faced by African states: the Millennium Africa Recovery Plan (MAP), led by former South African President Thabo Mbeki; the Omega Plan, developed by the former President of Senegal, Abdoulaye Wade.
The other was the New African Initiative (NAI), which was combined with the first two initiatives. In 2001, these were reworked and expanded to provide a framework for African states.
Another protocol that Nigeria has been advised to be aware of is the EPA. The former Tanzanian President, Mr. Benjamin Mkapa, advised Nigeria to resist pressure to sign the EPA with the EU because, according to him, such contract is counter-productive.
Mkapa sounded this warning as a guest speaker at a forum organised by the Manufacturers Association of Nigeria (MAN) recently. He warned Nigerian and other African leaders not to touch EPA as he likened it to a poisoned chalice.
He wondered how the continent can be asked to allow finished goods from advanced economies. He said such agreement was not in line with the aspirations of African countries, noting that African leaders should imbibe home-grown solution to address some of the developmental needs facing the continent, especially in industrialisation.
The Tanzanian President lamented that the continent was being encouraged to export primary products, instead of adding value to them, which is sent back to Africa as finished products at a higher cost. He said this can only be likened to modern day slavery.
“We should not follow global trend, rather we should work on where we have comparative advantage. Unfortunately, globalisation has made it almost impossible for national concept and value chain to prosper. African leaders must come to terms with what is good for their people and pursue it,” Mkapa said.
He also advised that African leaders should desist from following the options presented by Europeans, but rather look to China in terms of development and adaptation.
He said adopting the Chinese model is not only cheaper, but can easily lead to technology transfer and faster development judging from the growth of the Chinese economy in a short space of time.
Consequently, Mkapa encouraged African countries to “undertake some degree of industrialisation to add value to their agricultural and primary products and natural resources and ultimately, increase government revenue”.
The former MAN President, Dr. Frank Udemba Jacobs, also said MAN saw the EU’s EPA as a dagger directed at the heart of Nigeria’s industrial sector.
He explained that they have advised government that signing the agreement in its present form would impact negatively on local manufacturing and result in shutdown of industries with heavy job losses, because of the unfair competition that will evolve.
“Nigeria’s manufacturers are obviously unimpressed by the promised EU package of about $9 billion to the 15 members of ECOWAS, over a five year period, as MAN estimates that the Nigerian Treasury could lose over $1.3 trillion revenue from a significant reduction in import duties, if the EPA is also endorsed in its present state,” Jacobs said.
Nonetheless, proponents of EPA argued that the objective of ECOWAS Common External Tariff (CET) is to “build bridges of development, investment and trade cooperation between members of the Community and between ECOWAS as a trade block and other such regional or third party trade and economic union.”
Also, the pro-EPA lobbyists are optimistic that CET’s operation would create a level playing field for imports into the sub-region and significantly reduce smuggling and re-export of third party imports into Nigeria.
According to them, this is because of more favourable duty differentials of Nigeria’s neighbours. It was also speculated that the product of CET will be reflected in reduction of import duty leakages and contraction of opportunities for bribery and corruption at the nation’s ports.
Despite the supposed benefits, MAN has remained uncomfortable with the adopted classifications of Customs duties under the CET. For instance, essential social commodities, including pharmaceuticals, books, newspapers and others attract zero per cent duty; basic goods and raw materials attract five per cent, while intermediate goods attract 10 per cent.
Furthermore, finished consumer goods attract 20 per cent duty, while an additional tariff band of 35 per cent was created for those goods under Nigeria’s Absolute Import Prohibition List.
However, MAN recognised the difficulty in properly evaluating the categorisations, because of the fairly loose class definitions adopted.
For example, Nigeria has a growing pharmaceutical sub-sector, which could become non competitive with zero per cent tariff for drugs and medicaments imports from countries with lower cost of borrowing and superior supportive infrastructure.
MAN was also concerned that food and agricultural imports from such better endowed competitors may also reduce Nigeria’s chances of success in her attempts to be self-sufficient in rice and maize production.
Additionally, the manufacturing community noted that although the tariff for raw materials and production machinery has been set at five per cent, it would probably be more appropriate for these imports, for which there are no potential local substitutes, to also attract zero percent duty.
To them, this would further reduce production cost and cushion the adverse impact of high cost of funds and power on made-in-Nigeria products.
In addition, MAN’s opposition to EPA is premised on the reality that the sub-region’s different levels of economic strength and industrialisation will put Nigeria and other ECOWAS members at a trade disadvantage.
The above notwithstanding, economic and industrial growth, according to experts, are products of leadership’s abiding vision and the application of appropriate monetary and fiscal frameworks that accommodate lower single digit interest rates, low inflationary rate, appropriately price, stable and sustainable exchange rate regime, with supportive social and industrial technology and infrastructure.
Regrettably, these features, many analysts say, have remained alien to the Nigerian economy and, invariably, negate the expected benefits of the ECOWAS CET.
They, however, advised the Nigerian Government to protect the sectors in which Nigerian manufacturers already have a foothold, with the possibility of further growth that would positively impact employment and, ultimately, government revenue.