Recommendations for Freer Movement of Goods in West Africa

Borderless Conference May 16, 2012

3 Case Studies: Initiatives in Regional Trade Facilitation

1. ECOWAS Trade Liberalization Scheme Gap Analysis
2. Regional Agricultural Trade Policy and Transport Study 3. Open, Expedited Trade

Gap Analysis identifies implementation gaps in the ECOWAS Free Trade Area
Purpose
USAID West Africa Trade Hub supports ECOWAS, Member States and the private sector to increase trade and attract investment to the region. The ECOWAS Trade Liberalization Scheme was established over 20 years ago, to facilitate free movement of persons, goods and transport among Member States. In 2009, the Trade Hub carried out a Gap Analysis of the ETLS to identify which aspects of the protocols were being implemented or not.

Methodology
200+ private sector interviewed in 9 ECOWAS Member States on gaps and obstacles to regional market integration Interviews with government agencies tasked with dayto-day implementation, both in the capital city and borders Evaluation of legal and regulatory framework for implementation Compilation and review of all ECOWAS Protocols on free movement of persons, goods and transport; Schedules of official tariffs, taxes and fees

Borders Visited
Country Benin Burkina Faso Bordering Countries Benin/Nigeria Benin/Togo Burkina/Ghana Burkina/Mali Cte dIvoire/Ghana Ghana/Togo Ghana/Burkina Mali/Niger Mali/Burkina Niger/Mali Niger/Burkina Nigeria/Benin Senegal/Gambia Togo/Ghana Togo/Benin Name of Town/ Border Crossing SemeKrake Hilla-Condji Paga Heremakono Noe-Elubo Aflao Dakola Labbezanga Heremakono Labbezanga Makalondi/Kanchari Seme-Krake Karang-Amdalai Aflao Hillacondji
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Cte dIvoire Ghana

Mali Niger Nigeria Senegal Togo

ETLS Gap Analysis Preliminary Findings

ETLS Information Dissemination

Private sector has limited knowledge and access to information on official customs procedures for goods and vehicles in transit National legislation is difficult to obtain on procedures for transportation

Movement of Persons Visa-free travel has been accomplished Unofficial fees and harassment continue at borders Movement of Goods Duty free treatment for unprocessed goods is not being implemented contrary to the ETLS Documentary requirements for intra-ECOWAS trade have not been harmonized across the region, leading to higher administrative costs and delays at borders Non-tariff barriers persist, in the form of quantity, quota or seasonal restrictions, in addition to checkpoints and road barriers Transport Failure to harmonize procedures across the region creates opportunities for corruption Differing axle-load limits, vehicle standards and inspection requirements exist across the region Administrative procedures in conflict with regional rules drive up transport costs

Ghana Example

In 2010, Ghanas total Import Customs Revenues were GH cedi 2,347 million. ETLS-import revenues accounted for only 2.4% (1.5% without the Import Excise Tax on cigarettes) of Ghanas total Customs Revenues on imports. Unofficial rents are not included, but these often dont reach government coffers, anyway. Ghana, among others, has much more to gain from encouraging investment and FDI through OET than from imposing trade fees and red tape.
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Open, Expedited Trade (OET) is the Link

Countries with few trade restrictions achieve more rapid economic growth than countries with more restrictive policies (Baldwin, R.).

Trade alleviates poverty through different channels e.g., economic growth, market activity and government revenues (Winters, A.).
Faster economic growth raises income levels, which in turn allows governments more tax revenue to take redistributive measures (Winters, A., N. McCulloch and A. McKay).
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MERCOSUR A Success Story

ECOWAS Year founded Number of members Aggregate population (estimate) Dominant country (% of collective GDP) Mid-market Countries Intra-regional as % of total trade g in Global (1996-2007) g in Intra-regional (20032007) 1975 Fifteen 285 million Nigeria (65%) Ghana, RCI, Senegal 9% MERCOSUR 1991 Six 250 million Brazil (70%) Argentina, Chile 20% 10% pa 26%pa
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Conclusions & Recommendations

Growth in Africa is attracting world attention. Better trade is a shared responsibility

Public-Private Partnership

Companies have to do their part! Countries to better understand and promote localization advantages for investors (GIPC) OET encourages Private Sector to invest, with job, economic, social and tax revenue generation. BORDERLESS ALLIANCE (Advocacy)
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Questions / Comments??

Visit us online :
www.watradehub.com www.borderlesswa.com
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