In October, the African Development Bank finalized its strategy for Regional Integration Strategy Paper (RISP) in West Africa. Tradewinds recently the discussed the strategy with Moono Mupotola, the bank’s manager for regional integration and trade since 2009.
Moono Mupotola, the African Development Bank's manager of regional integration and trade.
: What is the bank’s plan for regional integration in West Africa?
Moono Mupotola: The Bank’s regional integration strategy was approved by our Board in 2009. The Bank is organized by regions – East, West, Central, South and North—therefore for each region, the Bank has developed a Regional Integration Strategy Paper, through consultations with respective governments and regional economic communities. The RISPs are the basis for the Bank’s support in the various regions. Four RISPs were approved – the one for the North is on hold due to the political situation there.
For West Africa, the ADB’s regional integration strategy paper covers the period from 2011-2015 and implementation starts in 2012. We’re looking at two “pillars”: The first focuses on linking regional markets through soft and physical infrastructure. The second focuses on supporting infrastructure investments through capacity building to effectively implement the regional integration agenda in West Africa.
TW: More broadly, what kinds of activities are envisioned?
Mupotola: For the first pillar linking regional markets, support will be provided in three areas: first, support to regional infrastructure, focusing on missing links in the trans-coastal and trans-sahelien highways and rehabilitation of priority corridors; the second area is transport and trade facilitation measures with emphasis on soft issues that act as barriers to trade; and third is regional energy integration focusing on production and market integration.
Let me give you some concrete examples: the Tema-Ouagadougou-Bamako Corridors where Bank support is a combination of both soft and hard infrastructure. The objective is to improve the accessibility of three landlocked countries – Burkina, Mali and Niger – to the Port of Tema in Ghana through the implementation of transit measures and improving the state of roads.
More recently the Bank has approved the construction of the Trans Gambia Bridge and Cross Border Improvement Project – which will create free flowing traffic between Senegal and the Gambia – adding another critical link to the ECOWAS transport corridors.
From left to right, Ometere Omoluabi, USAID Trade Hub Business Environment technical coordinator, (NAME) of the African Development Bank, USAID Trade Hub Director Vanessa Adams and Moono Mupotola.
: How much money is the Bank putting toward these efforts?
Mupotola: The estimated costs of the indicative pipeline of cross-border infrastructure projects, capacity building and knowledge projects stands at approximately US$1.5 million for West Africa, mostly leveraged with other donors. We are also in the process of establishing an Africa Trade Fund, of which trade facilitation and private sector development, particularly in the agricultural sector, are key pillars. The focus of the Africa Trade Fund will be on soft issues related to trade and regional integration. Our goal is to raise US$30 million in the next four years – we have already managed to secure a substantial amount to begin activities next year.
TW: How do the “soft” issues of regional trade fit in?
Mupotola: For the Bank, soft issues are important because of its involvement in cross-border infrastructure investments in the transport, ICT, energy and water sectors. The bank’s investments in these sectors can only be effective if soft issues are addressed. To this end, our unit (the regional integration and trade division) has developed an approach to transport and trade facilitation, which we shall pilot test in West Africa next year. We are also in the process of developing something similar for the energy sector—Power sector Soft Infrastructure Programme (PoSSIP).
Our trade facilitation approach will also address behind-the-border issues as these are important to deepen integration, particularly in relation to landlocked countries that face extra constraints as they are dependent on their neighbours to access ports. In fact estimates show that on average transport costs for African landlocked countries average 14% of the value of exports compared to about 8% for all developing countries.
TW: What are some of the answers to that question?
Mupotola: Some of the answers especially in addressing the situation of landlocked countries are to take a regional approach as this provides a general idea of where the bottlenecks are, particularly where domestic policies of one country affect another.
What’s making it very difficult is the implementation of the agreements. If only we could implement what we agree on, we’d go a long way. As development practitioners we must unpack what’s stopping implementation. Is it political will? Capacity? Finances? Understanding? Why is it that a country may remove a barrier and a few months later something else comes up? If countries are not serious about taking out the NTBs, it defeats the purpose of negotiating trade agreements in the first place. Perhaps if sanctions are applied, the situation would be different.
TW: And what’s at stake?
Mupotola: The stakes are very high, because Africa is part of the global economy and cannot afford to continue being uncompetitive. The less competitive Africa becomes, the more opportunities are lost to grow its economies and create jobs. But more importantly, are the lost opportunities for African countries to trade with each other, an option that can build resilience of Africa’s economies against external shocks, such as the economic crises in Europe, which have negatively impacted African exports.
TW: The Trade Hub’s studies point to the soft side of trade as particularly important.
Mupotola: Precisely. I couldn’t agree more. The bank’s trade facilitation programme, including the Africa Trade Fund will focus on the software, particularly to support the implementation of the ECOWAS Trade Liberalization Scheme. I am happy to know from my consultations, that the USAID Trade Hub is already working on several aspects of the ETLS, an area of potential collaboration between our two institutions especially in addressing non-tariff barriers such as complex rules of origin, cumbersome documents and discordant customs systems and procedures. Most of our programmes especially in transport are also supported by our country offices in the region, including the Bank’s Ghana country office.
: The Trade Hub has championed Borderless
, a broad campaign to increase trade across the sub-region. What are your impressions of Borderless?
Mupotola: The strength of the Borderless initiative is that it creates a platform for information that promotes regional integration in West Africa. I am drawn to two areas that the Borderless Alliance is engaged in: first is the focus to harmonize the ETLS, clearly some countries are implementing while others are not—the question is why isn’t implementation uniform? The second area is evidence-based research which could provide the bank with both the data and information to conduct effective policy dialogue with its regional member countries.
Partnership is key: the USAID Trade Hub is already on the ground, quantifying some of these non-tariff barriers, assisting informal traders and truck drivers. Your data would assist in our dialogue with member countries as we could highlight to them the costs and benefits of integration and implications for the development of their countries.
TW: How is the private sector engaged?
Mupotola: We finalized a study on the private sector role in trade policy recently. It appears that the private sector, especially in West Africa, is skeptical of the current integration efforts on the continent partly as a result of the slow pace of implementation of agreements. This is an open challenge for all of us promoting the regional integration agenda in Africa because it is the private sector that trades after all and not governments; how then can we effect change? Again our study shows that some private sector organizations are not even aware of the provisions of some of the trade agreements and do not see the benefits. Our study also found a general weakness of regional business associations and that many need assistance to become more effective especially in communicating, to the private sector, regional integration efforts and their benefits and challenges. This is an area that requires support.