BY Daniel Gumm
HIGH-LEVEL experts from ECOWAS member states, who met in Ghana, recently, have identified priority actions to improve the implementation of the ECOWAS Trade Liberalisation Scheme (ETLS), which would reduce the costs of doing business and increase regional and international trade. The two-day meeting was co-organised by the USAID Trade Hub and ECOWAS.
Deeper regional integration would reduce the costs of doing business and increase trade. According to the International Monetary Fund, sub-Saharan Africa’s recovery from the global financial crisis-induced slowdown is well under way, with growth in most countries now back fairly close to the high levels of the mid-2000s. (Growth this year is expected to average 5.5 per cent, and 6 percent in 2012.)
But trade within West Africa is paltry compared to trade from West Africa to the rest of the world. Experts believe that obstacles to trade within the region are largely to blame: a patchwork of rules and regulations as varied as the many cultures that make up the populations. The disharmony impedes business.
Referring to comprehensive studies on implementation of the ETLS conducted by the USAID Trade Hub – and inspired by stakeholder collaboration from both the public and private sectors – experts at the meeting in Accra identified concrete recommendations that will be presented to heads of state at a meeting later. The studies show that the main constraints affect the free movement of transport and goods.
The road map developed by the experts includes steps to:
*Create “Express Lanes,” or other mechanisms to accelerate movement of duty-free agricultural products through borders and ports
*Ensure free movement of transit goods
*Eliminate export bans and seasonal import restrictions, especially on cereals
*Reduce total checkpoints to a maximum of three per transport corridor
*Revise and accelerate National Approval procedures for ETLS registration in order to enable companies to move goods more cheaply and efficiently
There is still work to be done to harmonise procedures and documentation across the region, as well as to reduce non-tariff barriers, such as seasonal import and export bans, stakeholders agreed.
The stakes for regional integration are high even if progress toward the goal has been slow, stakeholders agreed.
As global investors and executives take up opportunities and continental entrepreneurs seek to access export markets, there is great potential for African countries to trade amongst themselves – whether on a trans-continental or trans-regional basis. But this means the internal barriers would have to come down.
Only a small amount of intra-Africa trade occurs in sub-Saharan Africa — accounting for less than 15 per cent of cross-border trade in Africa and less than 10 per cent of the GDP produced.
Whereas each of China, India, USA and the European Union represent one unified marketplace open for business, Africa – with a market size of close to 900 million people – is divided into 53 separate countries, each having its own border and barriers to the movement of goods, capital and people.
So in order for African businesses to be competitive, they need to take advantage of enlarged local markets and maximize economies of scale.
The issue is not that regional economic communities do not exist in sub-Saharan Africa.
In fact there are multiple, sometimes overlapping communities, each with similar goals of fostering cooperation and some degree of economic integration — typically as free trade areas, customs unions (free trade area with common external tariffs) or monetary unions.
The fact is that these regional communities are not yet as fully integrated as they ought to be.