Poor roads and railways, high transaction costs, lack of sufficient market information, incoherent trade policies by governments and bureaucratic hurdles are among limitations to free trade in West Africa. Import and export procedures are more costly and more time consuming in West Africa than any region of the world, experts say.
For instance, according to a 2010 study by the UN Economic Commission for Africa (UNECA), there were 47 checkpoints on the 500km road between Douala and Bertua in Cameroon, 19 on the 910km road between Ouagadougou and Bamako, and 34 on the 1,036km-long Cotonou-Niamey highway, resulting in losses of time and money - in bribes - as well as revenue.
In addition, lack of reliable bank-based transactions means that trade within West Africa mostly depends on personal relationships that have been built over time. “Such informal networks of traders lack the flexibility to diversify traded commodities [and] do [not] have the flexibility to move larger amounts of commodities to meet changing and evolving market demand and conditions,” said Aziz Elbehri, a senior economist with the Food and Agriculture Organization (FAO).
“Consequently, the prevailing informal, relationship-based transactions are inefficient, rigid and ensure that much smaller trade actually takes place than is possible given the trade potential, as reflected indirectly by the often huge price gap between centres of production and large urban centres of consumption,” he told IRIN.
Elbehri pointed out that the demand for maize in deficit areas, such as Mali and Burkina Faso, is poorly met due to these trade constrains. Sorghum and millet, mainly grown in the Sahel belt countries, are also not efficiently supplied to food processors within the region. Therefore, prices and productivity remain low.
“Expanding intra-regional trade can have a substantial positive impact on food security for the region given the similarity in the types of food consumed by the population.”
Hunger and harvest
This year, some 20 million people in the Sahel face food shortages, the UN Office for the Coordination of Humanitarian Affairs estimates.
The region is only emerging from the 2011-2012 food crisis that affected around 18 million people. That drought caused a 26 percent slump in cereal production compared to the preceding season.
Yields were better in the 2012-2013 season. Maize production in the Sahel and West Africa was 30 percent higher than the average output over the previous five years, and 16 percent above the preceding season. Nonetheless, millions still face food shortages, having depleted their seed stocks. Widespread poverty and the 2012 Mali conflict, which forced millions from their homes, worsened the food crisis. In any case, it will take more than one good harvest to turn around food deficits and cut malnutrition.
Between 2005 and 2009, only 3 percent of the maize produced in West Africa was traded within the Economic Community of West African States (ECOWAS), according to a book by Elbehri and others that assesses West Africa’s staple food systems.
“Even within a country, despite availability of food, food security remains a problem. Transportation is already difficult from a surplus area to an area of deficit within a country, and much worse on a regional level,” said Al Hassan Cissé of Oxfam’s West African bureau.
Not only does ample production in one area fail to compensate for underproduction elsewhere, it can also cause problems at home. In 2012, Niger experienced an overproduction of onions, its second highest export earner after uranium, causing prices to slump by 60 to 80 percent. “If intra-regional trade was working well, this surplus could have been sold on other West Africa markets and contributed to food security by raising the revenues of the producers,” Cissé said.
Trade flows and policy
ECOWAS exports 68.6 percent of produce outside the economic zone and just 9.2 percent to member states. Imports are equally in favour of external markets.
“For a customs union that is almost becoming a common market, this volume is still very low to allow member states to withstand external shocks,” said UNECA’s West Africa bureau in an email response to IRIN.
The ECOWAS free trade policy works on two levels. It enables the free movement of raw and artisanal products and the progressive dismantling of custom duties and taxes for industrial products from within the community.
The elimination of custom duties for industrial products should go hand-in-hand with the total removal of non-tariff barriers and other administrative hurdles to the free exchange of products manufactured within the economic community, experts say.
“In reality, however, administrative hurdles to the entry of the agreed products seem to persist. Moreover, lack of clear directives at the national level, in certain member countries, for their customs department to implement free trade remains an obstacle to intra-regional trade,” UNECA said.
In 2005, ECOWAS members agreed to an agricultural policy to boost investment in agriculture at the national and regional level. But Oxfam’s Cissé said that little progress has been achieved.
“Agricultural policies are strategic guidelines. They lack legal backing. What needs to be done is that a legal framework that countries must respect should be set up, which they must follow while crafting common agricultural policies,” he told IRIN.
Beyond free trade
Breaking down trade barriers alone will not open the way for robust economic growth. Countries must also make efforts to diversify and add value to their produce.
Improving infrastructure and the skills of workers, encouraging entrepreneurship, and boosting industrial output for a larger market are some of the strategies that complement open commerce, the UN Conference on Trade and Development said in a 2013 report.
But barriers along the value chain widen the gap between producer and consumer prices. In landlocked African countries, transport costs average about 14 percent of the value of exports, compared to 8.6 percent for all developing countries, according to UNECA.
“We are seeing more and more crises of accessibility than availability because many poor people are depending more and more on markets for food than their own production. This is where trade becomes more important in food security,” said Oxfam’s Cissé.
“Expanding trade between production-surplus zones and consumer-deficit zones should be a top priority for food policy in the region, as it allows smoothing out of supply-demand balances, evening out prices across regions [therefore lowering price volatility]… [This will] create a much larger demand-pull for stimulating supply, develop agro-processing, and improve the food quality overall,” Elbehri explained.
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions