What Ghana’s latest importation ban could mean for West Africa
Ghana, Nigeria’s largest trading partner in West Africa, has placed a ban on the importation of goods such as crude oil, cement and pharmaceuticals from Nigeria and other countries.
Ghanaian authorities are laying claim to unfair trade practices between both countries as the underlying factor for its decision. However, Ghana’s decision to place a ban on goods from Nigeria appears to be a retaliation for its inclusion in Nigeria’s “Import Prohibition list” as part of the measures to restrict foreign exchange and manage the country’s reserves.
With Nigeria still trying to deal with the fast-dwindling value of the Naira, struggling to find buyers for its chief export – crude oil and cocoa, among other farm produce – it appears Ghana has discovered how vulnerable Nigeria has become and this recent importation ban could lead to more woes for the West African sub-region at large.
Here is what the importation ban could mean for West Africa:
A decline in Nigeria’s foreign trade
Ghana remains Nigeria’s largest trade partner in the West African sub-region as the country imports the largest share of all Nigerian oil exports in West Africa. The prohibition of these goods is bound to affect the Nigerian economy which had enjoyed robust foreign trade with Ghana before now.
Nigeria accounts for about 10 percent of Ghana’s foreign trade volume while Ghana is Nigeria’s ninth largest trading partner, importing the largest share of all the country’s oil exports. Companies like Dangote will also experience low earnings following Ghana’s new decision.
Old alliances are fading away
Ghana-Nigeria relations have undoubtedly gone through many twists and turns. As the two largest economies in West Africa, the relationship between Nigeria and Ghana remains crucial for the region but this latest development could mean the alliance is gradually deteriorating.
Since the discovery of oil by Kosmos Energy in 2007, Ghana has mapped out plans to harness its natural resources. Presently, Ghana boasts of 25 new oil discoveries within its offshore maritime boundary and is expected to produce 250 million metric standard cubic feet of gas per day and above 190,000 barrels of oil per day in the next five years. This signals a reduction in its large dependence on Nigerian crude oil.
The Ghanaian government has every reason to be self-reliant as it is mapping out strategies to utilise its natural resources and compete with Nigeria in the global market. Furthermore, Kate Quartey-Papafio, CEO of Reroy Cables, noted that making export difficult for Nigeria will enable Ghana find common ground.
A weakened regional economic community
Currently, Ghana and Nigeria are said to account for about 68 percent of the Economic Community of West African States (ECOWAS) region’s Gross Domestic Product. This hostile relationship undermines trade growth and poses a threat to regional integration.
Given the economic and political importance of Ghana and Nigeria to the economic growth and development of West-Africa, simplifying trading procedures at the border and registration requirement for products to meet national standards through thorough reviews of existing laws and taxes in member states remains crucial.
The post What Ghana’s latest importation ban could mean for West Africa appeared first on Ventures Africa.