By Rossette Aliu
Regional integration has been part of the African continent’s overarching strategy for economic transformation for over five decades. When the African Union commemorates 50 years of existence, one of the suggested approaches to building a strong integrated union is through regional groups such as the Economic Community of West African States (ECOWAS), East African Community (EAC), and the Southern African Development Community (SADC).
The key question raised in the African Development Bank paper “Border Posts, Checkpoints and Intra-African Trade: Challenges and Solutions” is why have countries involved in regional integration in Sub-Saharan Africa failed to foster competition, access to wider markets (via trade), larger and diversified investments/production, socioeconomic stability and bargaining power?
What are the fundamental challenges to trade (the free movement of goods and services) that need to be addressed in order to fully reap the benefits of regional integration in Africa?
Trade is widely accepted as an important engine of economic growth and development. There are many regions and countries of the world that have been able to lift their peoples from poverty to prosperity through trade. Although the African economy is characterized by a relatively high degree of openness, with the ratio of exports and imports to GDP on the increase in the past few years, trade has not served as a potent instrument for the achievement of rapid and sustainable economic growth and development for many of the countries. As a consequence, Africa remains the most aid-dependent continent in the world, unable to eliminate poverty through trade.
African countries do not trade much with one other, thus they have been unable to take full advantage of the economies of scale and other benefits such as income and employment generation that greater market integration might have provided. Due to the fact that Africa does the bulk of its trade with the outside world and exports are heavily concentrated on primary commodities, the continent has been particularly vulnerable to external microeconomic shocks and protectionist trade policies. However, the continent can only reduce its vulnerability to external shocks and improve its economic performance if market integration is deepened and countries do more to promote intra-regional trade.
A body of 15 nations established in 1975, ECOWAS aspires to promote economic integration “in all fields of economic activity, particularly industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial questions, social and cultural matters.”
However migration within the zone remains a challenge. It is estimated that between Badagry (the exit port from Nigeria to Benin) and Noe (the entry port from Ghana to Côte d’Ivoire) there are about 120 border posts and security check points, forcing individuals crossing these borders to switch intermittently from one official language to the other and exchange currencies several times across borders. These trips are difficult and discourage frequent travel. It is widely known that frequent intimidation and harassment is often the norm as officials threaten and extort at the borders before allowing passage.
In a region that has experienced much turbulence; the core challenge is how to improve the processes of moving goods, persons and services across national boundaries, and, going forward, operating efficient border posts with straightforward customs procedures. To date, few trade facilitation initiatives have successfully addressed this challenge. Improving border posts and customs procedures will not only reduce the cost and delays incurred by commercial companies and enhance trade competitiveness, but will also boost government revenues and accelerate economic development on the continent.
At a time when other continents are further integrating to boost their international competitiveness, the West African region cannot afford to lag behind. Given the general relatively low wages in the region, curbing extortion and official corruption at the borders would encourage ECOWAS nationals to commute across borders and enhance trade.
While there has been a consensus among African leaders and policymakers on the need to speed up improvements in trade and regional integration, progress in facilitating the cross-border movements of goods and services has generally been slow. Trade facilitation measures in Africa have ranged from the reduction of tariffs and the removal of quotas, to the creation of sub-regional customs unions and a common market. Nonetheless, many obstacles remain and there is a clear imperative to improve trade transport infrastructure and services and to strengthen the efficiency of border clearance procedures as a means to reduce the high cost of trade in Africa and make the continent more competitive.
Source: African Development Bank paper “Border Posts, Checkpoints and Intra-African Trade: Challenges and Solutions