Red tapes in ECOWAS as deterrence to AfCFTA implementation

Ratifying the African Continental Free Trade Area (AfCFTA), comes with a lot of responsibilities, some of which include opening up markets for trade and economic cooperation. Within the ECOWAS region, however, lingering issues and reported abuse with regards to the movement of goods and people under the ECOWAS Trade Liberation Scheme (ETLS) remain a concern for private sector operators. FEMI ADEKOYA writes on how non-tariff barriers are being used by neighbours to restrict integration.

Advocates of AfCFTA believe that the trade deal will help to address Africa’s economic challenges and allow for the greater, prosperous flow of trade within the continent.

Despite the opportunities, gaps currently remain in the modalities for trade in goods in the AfCFTA, solidarity across the continent’s diverse countries; large membership to break the curse of small markets; and deep integration to reap all the benefits of close economic cooperation.
Beyond language, currency and culture, economic policies of some ECOWAS member states pose some challenges to economic integration in the region.

In 2015, three Regional Economic Communities (RECs) — the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and Southern African Development Community (SADC) —reached an agreement to expedite the process towards the operationalisation of a tripartite Free Trade Area in preparation for the AfCFTA by finalising outstanding issues. But the ECOWAS region, was yet to decide on the AfCFTA, as the region continued to deal with other trade issues.

Since the signing of the agreement establishing the AfCFTA on March 21, 2018, in Kigali, Rwanda, by 44 member States of the African Union, one of the key steps beyond the ratification of the agreement is to prepare and submit tariff offers, under the modalities on goods, that will determine the liberalisation efforts to be undertaken among the States that are parties to the Agreement.

In the modalities for the liberalisation of trade in goods that were adopted during the negotiation process, African Union member States agreed to remove at least 90 per cent of tariffs on goods imported from other States parties.It remains unclear, however, whether the 90 per cent of tariffs refers to 90 per cent of total tariff lines only or a combination of a minimum of 90 per cent of total tariff lines and not less than 90 per cent of total value of imports, also known as double qualification.

In addition, there are uncertainties over the remaining 10 per cent tariffs and how these are to be approached in relation to exempted and sensitive products, and how those tariffs are to be liberalised, whether partially or in full, and over what time frames.While these issues linger with the number of ratifications needed for the deal to take off yet to be reached, there are concerns in the ECOWAS region of the use of high capital requirements, trade restriction policies, non-citizen identity cards among other measures, to edge out neighbours that are believed to take over markets with their investments.

According to members of the OPS, use of non-tariff barriers in the form of domestic polices continues to limit the desired integration that the African Union (AU) member states seek.Citing the ongoing challenges Nigerian traders experience in Ghana, the stakeholders noted that if the concerns are not addressed, the continent will be paying lip service to the ideals of continental trade and may have to contend with global forces.

For instance, the continued deportation of some Nigerians from Ghana on allegations of cybercrime, prostitution, and illegal stay as well as the use of domestic policies to stifle business owners in parts of Ghana, has been cited as discouraging to the implementation of the economic integration agenda.

The Federal Government reminded Ghana of the Economic Community of West African States (ECOWAS) Protocol on free movement of persons to migrate to the various member nations without necessary valid documents.To such end, the Nigerian High Commissioner to Ghana, Michael Abikoye, had since submitted an official protest of the Nigerian government over what he described as “inhuman treatment of Nigerians by the Ghana Immigration Service”.

Similarly, the Federal Government noted that it would begin the enforcement of available immigration laws that allow only foreigners with the requisite residency and work permits to live and work in the country.The Minister of Power, Works and Housing, Babatunde Fashola, said the government is currently undertaking the audit of foreigners working at various work sites and businesses across the country to determine the population of foreigners working in Nigeria without a valid work permit.“Every foreigner who has the work permit to come to Nigeria legally is welcome. But, if you don’t have the relevant papers, we will take you out.

“It is the right of every country to exercise by determining who comes or stays to work in its country. But, we (Nigeria), have not been exercising such rights all these years. We are going to begin to enforce it now”, Fashola added.The President of the Lagos Chamber of Commerce and Industry (LCCI), Babatunde Ruwase, at a recent forum told The Guardian that the ECOWAS region offers potential market of 386 million people and such opportunity may not be realised without full market integration.He noted that the use of domestic policies that negate the spirit of economic integration in the sub-region limit bilateral ties among member countries.

“There are numerous institutional and infrastructure 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,” he added.

On his part, the President of Nigeria Union of Traders Association, Ghana (NUTAG) Chukwuemeka Nnaji, stated that despite the provisions of ECOWAS protocols, Ghana’s use of its GIPC Act 865, section 27 (1a) of 2013, flouts the provisions on rules of engagement.He noted that while Ghana continues to enjoy the privileges conferred on ECOWAS citizens in the region, the government and its people continue to prohibit other citizens from doing same in Ghana.

“Despite the discussions between Nigerian and Ghanaian governments at the United Nations General Assembly in New York, the ordeal of Nigerian traders in Ghana escalated as the Ghana Union Traders Association took a different turn by attacking businesses in the Ashanti region.“Getting a residence permit is more difficult than getting USA green card. The conditions are enormous. Already, we are advising Nigerian traders to leave Ghana until the challenges are addressed, especially as Ghana Immigration Services are equally cracking down on foreigners, particularly Nigerians,” he added.

A representative of Ghana High Commission, Sintim Barimah Asare, appealed for calm and understanding among operators, adding that his country remains committed to the ECOWAS treaty.Noting that the Ghanaian government seeks to protect its petty traders from undue competition, Asare said the GIPC law is for medium and large enterprises and not for micro businesses.

Representative of the Nigeria-Ghana Business Council, Ms Abiola Ogunbiyi, sought for understanding of the provisions of the ECOWAS treaty, adding that while provisions of the regional integration treaty presupposes that things are working, the reality is different.Although negotiations on technicalities are still besieging Phase I of the AfCFTA — including agreement on a common set of rules of origin, a dispute settlement mechanism and trade remedies, there are concerns that these technicalities may linger till Phase II negotiations of the deal.

Similarly, trust among neighbours remains difficult to build with everyone seeking to protect their markets by limiting areas of liberalisation to satisfy political objectives, therefore impeding deep integration.