Nigerian traders sue Ghana over investment Act

law-and-justiceNigerian traders in Ghana have dragged the country to the ECOWAS Community Court of Justice over the enforcement of the Ghana Investment Promotion Council (GIPC) Act.

The act, which was revised in July this year, among others, specifies the criteria foreigners would have to meet before they can be allowed to do business in the contry.

It also bars foreigners from trading in the country’s markets.

The petitioners, led by the National Association of Nigerian Traders (NANTS) and the Nigerian Union of Traders Association, Ghana (NUTAG), believe the act is in contravention of the ECOWAS Protocol on Free Movement of Goods and People and are thus, praying the sub-regional court to intervene and stop Ghana from continuing with its implementation and enforcement.

Ghana, through the ministries of Trade and Industry (MOTI), Foreign Affairs and Regional Integration and Justice and Attorney-General, has responded to the matter, urging the court to discard the petition.

The Minister of Trade and Investment at the Ghana Consulate in Lagos, Mr Ben Heh, made this known to the Daily Graphic in Lagos, Nigeria.

“As we speak, the Nigerian traders have sued us in the ECOWAS Court and their issue is that the protocol on the free movement of goods and people allows them to trade in the country without any hindrance,” Mr Heh said, adding that the court action was the least expected by his outfit.

Mr Heh spoke to the paper on the sidelines of the Lagos International Fair, which ran from November 1 to 10.

The Ghana Export Promotion Authority, which is the non-traditional export promotion arm of the MOTI, sponsored some 51 companies from the country to participate in the fair.

New GIPC Act
Prior to the revision of the new GIPC Act, Act 478, 1994, in July this year, a task force comprising officials of the MoTI, the Ghana Union of Traders Association (GUTA) and other stakeholders was formed to strictly enforce the act.

The act, among other things, bars foreigners from engaging in petty trading and retailing, especially in areas designated as markets.

The old act was, however, replaced in July this year with a new one that sought to align the country’s investment laws with modern trends in business.

The new one raised the minimum capital for foreigners wishing to do business in the country from the previous $300,000 to $1 million either in cash or goods.

It also seeks to address the rampant repatriation of profits by foreign entities by tying it with technology transfer to locals, while urging that Ghanaian partners in joint ventures own at least 30 per cent equity participation in such entities.

The Nigerian business community sees this as a threat to the ECOWAS Protocol on the free movement of goods and people within the sub-region, hence the legal action.

Lagos Chamber not happy
Already, the business community in Nigeria has thrown its wait behind its compatriots in Ghana.

“Ghana needs to open up to Nigerians like Nigeria is doing. What we are hearing and were told by our High Commissioner (to Ghana) is that whenever Nigerian businesses want to repatriate their profits from Ghana, it doesn’t work and your laws also make it very difficult for them to do business. That shouldn’t be the case,” the Deputy President of the Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, said in a separate interview.

He added that Ghana’s investment laws appeared selective and thus served as a deterrent to foreign investments, especially to those from Nigeria.

Mr Heh, however, disagreed, explaining that Ghana was encouraging sanity in the business environment.

On the issue of profit repatriation, he said, “Investments that are legally registered with the GIPC won’t have difficulty repatriating their profits.”

Diplomatic row
The current court action by the Nigerian traders follows a series of failed petitions and negotiations initiated by the Nigerian community in Ghana for the implementation of the act to be softened.

An estimated 2.5 million Nigerians are in Ghana, most of whom are into the retailing of mobile phones, computers and other goods and services, mostly in the markets.

The traders, earlier this year, had petitioned their High Commission in Ghana, the National Assembly in Nigeria and the ECOWAS Parliament, which is headed by a Nigerian, to intervene on their behalf.

The Leader of the House of the Nigerian Representatives Committee on Diaspora, Mr Abike Dabiri, was also quoted earlier this year as saying Ghana needed to reverse the implementation of the act or risk running into a diplomatic row with Nigeria.

Those diplomatic manoeuvres, however, failed to yield the desired results, leading to the current court action.

On what Ghana would do, given that Nigeria was a strategic ally of the country, Mr Heh said, “In issues like this, what we normally do is that if the matter is not withdrawn, then we wait to see what comes out of it so we can take it up from there.”

However, indications are that Ghana will argue that the ECOWAS Protocol, which the country signed onto, is not superior to its internal laws, especially given that the GIPC Act does not prevent West Africans from investing in the country but requires them to meet the various investment requirements.

Source: Daily Graphic

  1. Kojo says

    Two things. Ghana should continue to fight the case at the ECOWAS court. ands ifs the judgment is not in Ghana’s favour then the right thing to do is to withdraw from ECOWAS. The sovereignty of Ghana cannot be compromised under any circumstance. Ghana will rather quit ECOWAS than allow an ECOWAS court to dictate to it. I really don’t see what benefits Ghana derive from ECOWAS. As for the Nigerians, they made a very big mistake by taking Ghana to court. Even ifs the court rules in their favour, can they continue to operate in Ghana if Ghanaians make the country very hostile for them? Nigerians are not the only foreigners in Ghana, yet every time they are the only ones making exceptional demands on the Ghanaian state. It is as if they want to be treated different from other foreigners in Ghana. Do Nigerians treat Ghanaians in Nigeria special? Hell no. I lived in Nigeria and know how hostile they were to Ghanaians in that country. so let us continue to ignore them as we always do, God Bless Ghana

  2. Akin says

    In response to the gentleman comments above, I do not think Ghanaians have anything to fear. Nigerian are extremely competitive but were not hostile to foreigners living or doing business in Nigeria. Though I believed the government of Ghana has duty to protect her citizens economy interest but they should create enabling business environments for other ECOWAS citizens doing business in the country. Trade barriers that existed within countries in West Africa has continues to undermine the economic developments of the region. So to says Ghana do not have any benefits to derive from ECOWAS is short sighted, even when developed countries are removing trade barriers and strategically positioned their countries to take advantage of bigger market. Personally I have been thinking of open a business branch in Accra as part of our business strategy to access Togo and Ivory Coast but in light of current climate, I have decided to wait.

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