Challenges to regional integration identified

Tuesday, January 12 2010

Ometere Omoluabi

Ecowas member states that were surveyed
The Trade Hub interviewed public and private sector representatives in eight countries to analyze gaps in the implementation of ECOWAS protocols on the free movement of people, goods and transport.
In a group interview in  September, 18 disgruntled truck drivers in Cotonou, Benin, vented their frustrations to two Trade Hub consultants: driving freely from Cotonou to Ouagadougou was impossible without harassment, they said. They sometimes spend three days at borders where customs officials hold up paper work when they refuse to pay bribes; meanwhile, their clients in importing countries wait impatiently to receive the goods.

At the borders and checkpoints where unofficial fees were demanded, they do not receive receipts to prove payment later to their clients. Like many other transport companies in the region, they bear costs and lose income due to unpredictable expenses on West African roads and borders.  

“Even when you have all the paperwork, it is not always taken into account,” one said. “There is not a lot of documentation required really, but there are too many unnecessary delays.

“Laws are different from country to country and the fees are exceptionally high.  There is really no free movement across West Africa.”

The truckers' experiences were echoed in interviews in eight countries conducted by the Trade Hub to determine how well West Africa is economically integrated. The unfortunate answer is: not very well. The interviews are part of a study of the gaps between what regional policies say on paper and how they are actually implemented in ECOWAS Member States.

Two Trade Hub teams conducted the interviews from May to September. One interviewed public sector officials and agents who enforce policies on the movement of persons, goods and transport, that should be consistent with ECOWAS protocols. The other team interviewed company managers, transporters and others who see daily how those policies are actually enforced.

PullquoteThe team conducted hundreds of hours of interviews in Benin, Burkina Faso, Cote d'Ivoire, Ghana, Mali, Niger, Nigeria and Togo, involving over 200 people. It learned that the gaps between what ECOWAS Member States have agreed to do and what actually happens in each state are significant. None of the countries is fully implementing the ECOWAS Trade Liberalization Scheme – the set of protocols meant to achieve integration. The remaining seven Member States will be surveyed in coming months.

The ETLS was designed over 20 years ago to facilitate trade in West African goods, agricultural and industrial, between ECOWAS Member States.  The goal of the ETLS was to create a common market where locally produced goods can move freely from country to country within the region. But Member States are behind in the implementation of several agreements due to structural and institutional problems.

In the interviews, the private sector expressed frustration with the challenges involved in regional cross-border trade, and some public officials were unable to explain the benefits of upholding and implementing the ETLS – or, in some cases, what the protocols actually say. 

With different documents required in different countries, persons, goods and vehicles crossing West African borders can anticipate delays, harassment, and payments without receipts at the borders.  These obstacles mean higher costs for importers, exporters and transporters – which ultimately mean higher costs to consumers. Whether trucks are carrying tomatoes and produce from Ouagadougou to Lome, or bottled drinks from Lome to Cotonou, the challenges are not very different.  Most border posts are understaffed, have no internet access, and suffer from limited resources to carry out their duties properly and efficiently.

“Making regional integration a reality requires harmonization of trade policies and practices to eliminate uncertainty for traders and customs officials at borders,” said Trade Hub Business Environment Advisor Lori Brock. “There is a price to pay when a region fails to come together following agreements, regardless of language or currency barriers.”  

 

Rudimentary border crossing facilities
Inadequate infrastructure is affecting the implementation of ECOWAS protocols, the Trade Hub's study found. This old camper was being used as a phytosanitary inspection facility at one border crossing.

Company managers agreed.

 

“What we need is true integration, because free movement of persons, goods and transportation exists in theory, but not in practice at the borders,” said Thomas Agbotounso, CEO of Societe Athoms & Fils in Cotonou, Benin, and an active member of a union of transit companies. “Regardless of all the conferences that have been held, goods do not pass freely, and in fact, certain passports sometimes get rejected at the borders.  The ETLS is not in full effect, and the people suffer the most having to pay exorbitant prices for goods within the ECOWAS region.”

The study revealed that public and private sector respondents alike had limited knowledge of how the ETLS should be working but understood that there should be duty free treatment for some goods within the region. However, they were unclear about the rules on specific regionally-sourced goods such as agricultural produce, livestock, and handicrafts which should be duty free if that are of 100% ECOWAS origin. 

Under the ETLS, industrial goods of 100% ECOWAS origin and at least 30% local value added that have been approved under the ETLS scheme should also transit and arrive duty free.

Public officials also gave input on the structural problems they face at borders. Without basic infrastructure and necessary support from national capitals (where legislation is put into effect), officials at borders, even when knowledgeable about the protocols, have little incentive to fully follow them. Currently, governments are losing millions in revenue from unrecorded goods crossing borders on a daily basis.

“How can West Africa proceed in making regional integration a reality?” interviewers asked during surveys. Respondents requested more information dissemination and proper education on the significance of regional integration. One critical finding during surveys was that when policies do change at border posts, the private sector has no formal way of finding out – companies usually discovered new fees and processes upon arrival at the border.

In the private sector's view, lack of information makes free movement of goods not free and discourages regional commerce, as it becomes cheaper to source from other regions.  

“Responsibility does not only lie in the hands of the public sector,” said Kola Awe, of Xpt Logistics, a shipping company based in Lagos, Nigeria. "The ECOWAS Commission should stand up and face the reality, and if the protocols stand, the private sector should take advantage of the ECOWAS Court when the regulations fail to be implemented. The private sector has a strong role to play.”

Many company representatives across all eight countries echoed Awe’s view, saying that in addition to establishing the ETLS, both the public and private sector should cooperate in making regional integration a reality.

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