ECOWAS IS DEAD - LONG LIVE ECOWAS
A study of Ghana
and
regional integration
Association of Ghana Industries and DI International Consultancy
September 2000
The outlined section shows the members countries of ECOWAS.
2
TABLE OF CONTENTS
1
INTRODUCTION
6
1.1
Executive summary
6
1.2
5 barriers to trade and 11 ways of removing them
9
1.3
Research objectives
10
1.4
Limitations
10
1.5
Methodology
10
1.6
Structure of the paper
11
2
TRADE IN WEST AFRICA
12
2.1
Background
12
2.2
Comparative economic study
13
2.3
West African trade patterns
14
2.4
Ghanaian trade patterns
16
2.5
Ghana’s export to Nigeria and Côte d’Ivoire
17
2.6
Conclusion
18
3
ECOWAS
20
3.1
Background
20
3.2
Structure of ECOWAS
21
3.3
Payment of contributions
21
3.4
Free movement of goods
22
3.5
Status on TLS
25
3.6
Status on cross border payments
26
3.7
Infrastructure
28
3.8
Private sector initiatives
29
3.9
UEMOA
30
3.10
Comparison of ECOWAS and UEMOA selected areas
33
3.11
Conclusion
34
4
THE GHANA-NIGERIA FAST TRACK
36
4.1
Background
36
4.2
The fast track
37
4.3
Policies on regional integration
38
4.4
Monetary integration
40
4.5
Creation of a free trade area
42
4.6
The fast track negotiations for free trade
43
4.7
Private sector initiatives
45
4.8
Investments
45
3
4.9
Donor support to regional integration
47
4.10
Conclusion
49
5
PRIVATE SECTORS VIEWS ON REGIONAL INTEGRATION
50
5.1
Background
50
5.2
Direction of regional integration
50
5.3
Potential benefits to industry
51
5.4
Private sector priorities, Côte d’Ivoire and Nigeria
51
5.5
Ghana’s competitive advantages
54
5.6
Conclusion
56
6
PROPOSALS FOR SUPPORT
57
6.1
Introduction
57
6.2
1. Red tape concerning export/import procedures
59
6.3
2. Lack of an intra-regional payment and clearing system
62
6.4
3. Road blocks and obstructive attitude of officials
63
6.5
4. Mistrust between operators in the sub-region
65
6.6
5. Lack of an enabling environment for Ghanaian exports
67
0
7
69
ANNEXES
70
7.1
Annex 1: Status on contributions
70
7.2
Annex 2: Recommendations
71
7.3
Annex 3: Company Interviews - Ghana
72
7.4
Annex 4: Contacts
83
7.5
Annex 5: Bibliography
85
7.6
Annex 6: Plan of Action for establishing a free trade area, January - December 2000
88
4
ABBREVIATIONS
ADB
AGI
APEC
ASYCUDA
BCEAO
BOAD
CEPS
DANIDA
DI
EAC
ECOWAS
EPZ
(E)TLS
EU
FDB
FEWAMA
FNISCI
FWACC
GIPC
GNCCI
GSB
GSE
IPA
MAN
NACCIMA
NAFTA
NSB
NSE
NIPC
PEF
SADC
SMZ
SON
UEMOA
UMOA
UNIDO
USAID
WAEN
WACH
WAIPA
WAIPS
WAMA
WTO
African Development Bank
Association of Ghana Industries
Asian Pacific Economic Co-operation
Automated System of Customs Data
Banque Centrale des États de l’Afrique de l’Ouest
Banque Ouest-Africaine de Développement
Customs Excise Preventive Service
Danish International Development Assistance
Confederation of Danish Industries
East African Community
Economic Community of West African States
Export Processing Zone
(ECOWAS) Trade Liberalisation Scheme
European Union
Food and Drugs Board
Federation of West African Manufacturers’ Associations
Fédération Nationale des Industries et Services de Côte d’Ivoire
Federation of West African Chambers of Commerce
Ghana Investment Promotion Centre
Ghana National Chamber of Commerce and Industry
Ghana Standards Board
Ghana Stock Exchange
Investment Promotion Agency
Manufacturers Association of Nigeria
Nigerian Association of Chambers of Commerce and Industry
North American Free Trade Area
National Standard Board
Nigerian Stock Exchange
Nigeria Investment Promotion Commission
Private Enterprise Foundation
Southern African Development Co-operation
Second Monetary Zone
General Standards Organisation of Nigeria
Union Économique et Monétaire Ouest-Africaine
Union Monétaire Ouest-Africaine
United Nations Industrial Development Organisation
United States Agency for International Development
West African Enterprise Network
West African Clearing House
West African Investment Promotion Association
West African Interbank Clearance System
West African Monetary Agency
World Trade Organisation
5
1 Introduction
1.1 Executive summary
Intra-regional trade in Africa has for many years been dismally low compared to
trading blocks in the industrialised countries. Trade in the ECOWAS sub-region is
no exception. Exports to the sub-region still hover at around 10% of total exports the same level as in 1980. Ghana’s trade patterns in many ways resemble the patterns for the rest of the sub-region, with the bulk of trade taking place with the EU.
From the West African sub-region imports to Ghana mainly consist of products such
as oil and electricity, while exports are more diversified. Togo and Burkina Faso, the
tenth and seventh largest markets in the sub-region, are the main export destinations of Ghana. The potentially largest markets Côte d’Ivoire and Nigeria are only
the sixth and seventh largest export destinations. It is in these countries that the
largest unexplored potential lies.
Hopes were high when the ECOWAS treaty was signed 25 years ago in Lomé, Togo.
The Heads of State and Government envisioned a West Africa with strong trade relations, strengthened political co-operation and free of colonial ties. However, in the
ensuing decades progress was slow; so slow that ECOWAS was considered a failure
by many observers. This finally led to a new ECOWAS treaty. In 1993 The Heads of
State and Government decided to revitalise the community by signing a treaty with
even more ambitious goals. This time the co-operation was to be extended into an internal market, a common currency and a West African parliament. Unfortunately
the new treaty was no more successful than the old one. Only few of the basic goals
of the treaty have been achieved and the ECOWAS countries are as unified now as
they were 25 years ago.
Nevertheless, ECOWAS has achieved something. The institution has an impressive
secretariat in Abuja, Nigeria. 700 goods have been approved under the ECOWAS
Trade Liberalisation Scheme. Infrastructure development has progressed through
the telecommunication project Intelcom 1, which established communication links
between the ECOWAS capitals. The Trans-coastal and Trans-sahelian highways
have improved road transport conditions in the sub-region. Financial services in the
sub-region have also been improved through ECOBANK. But high profile ECOWAS
institutions such as the ECOWAS FUND and the West African Monetary Agency
have never had the desired impact on economic development. Cross border trade is
still so cumbersome that many companies have given up exporting directly to the
sub-region.
Where should the responsibility for ECOWAS’s failure to integrate the economies be
placed? The main fault must lie with the member states. It is the member states that
have failed to implement the treaties that they themselves have signed. Furthermore, they have never given the ECOWAS institution sufficient power to pursue the
goals of the treaties and penalise member states that failed to implement them. If
the ECOWAS institution is to become a success in the future, the authority of the secretariat must be enhanced and member states must become truly committed to the
ECOWAS project. Otherwise there is a real risk that progress in the next 25 years
will be as slow as the progress to date.
6
Recently, ECOWAS has been given new hope through the Ghana-Nigeria fast track
initiative. The fast track is an offspring of the lack of progress within ECOWAS.
However, the rapid and successful integration between the UEMOA countries is also
an important factor. UEMOA has managed to unite 8 francophone countries in West
Africa – all of them also members of ECOWAS. With a common currency, a customs
union established on January 1, 2000 and plenty of external support, the UEMOA
countries are preparing for further integration. Ghana and Nigeria had to come up
with a new initiative in order to stay at the centre of political developments in West
Africa. The fast track initiative is open to all ECOWAS members. It is, however,
more likely that the fast track countries and UEMOA will merge later. Consequently, ECOWAS has been revived albeit in a new and fragmented shape.
It was President Obasanjo of Nigeria that initiated the Ghana-Nigeria fast track in
Lomé in December 1999. He urged the ECOWAS leaders to adopt a two-track approach to regional integration. If two or more member states were ready to implement a particular ECOWAS programme, they should be allowed to do so. These
countries would then be the fast track to which the slower track could join later. The
idea was formally endorsed by the ECOWAS Heads of State and Government in Bamako, Mali in January 2000.
The aim of the fast track initiative is to establish a second monetary zone by 2003
and a free trade area beginning from year 2000. Furthermore, the chief executives of
UEMOA and ECOWAS have been given the task of finding strategies for merging
the fast track countries and UEMOA. Both Ghana and Nigeria have shown ample
proof of their commitment to the fast track negotiations. At the very top the Presidents of the two countries have consistently advocated for an accelerated integration
process and have personally attended a number of high-level summits to show their
support.
This commitment has also been reflected at the lower levels of administration from
ministers to civil servants. Relevant ministers attend meetings along with the key
government institutions and large delegations are sent for the negotiations. Involvement of the private sector is seen as very important to the whole process and
some of the leading organisations have been invited to participate. Altogether, the
negotiations reflect a commitment and pace that has never before been seen in the
ECOWAS context.
Concrete initiatives are also being implemented by the government of Ghana.
ECOWAS travellers’ cheques were sent into circulation in 1999 and banks report an
increasing interest in their use. On April 15, 2000 a new regulation on a 0,5% duty
on imports from non-ECOWAS countries was implemented. The revenue from the
duty is to be used for paying arrears and contributions to the ECOWAS secretariat
and funding for a compensation mechanism. Ghana has also recently created a fast
track committee, chaired by Vice-President Mills. At the fortnightly meetings, Ministers and chief executives from the involved government institutions are asked to account for their progress in achieving the goals of the fast track. A recently created
ministry of regional integration is also likely to play an increasingly important role
in regional affairs.
7
Despite all the positive signs there are still elements lacking in the negotiations. The
results of the fast track have not yet trickled down to the operators that ultimately
stand to benefit from the initiatives. The private sector has not been fully briefed on
the essential issues and the feeling is that the process is moving along without much
attention to the reality on the ground. Though the principles and political statements
of the negotiations have easily made the headlines, precise information on the implications for traders are lacking. Even more pressing is the establishment of a proper
consultation and sensitisation process. Everyday experiences with the harassment
and hassles of cross border trading have to be highlighted and dealt with.
The companies that have participated in this study ask one basic question: “Are we
ready to integrate?” The general feeling is that the necessary enabling business environment for cross border trade has not yet been put in place. A number of barriers to
trade exist and the fast track does not include the necessary measures for dealing
with them. The following example highlights the problem. On August 7, 2000 the
Minister of Trade and Industry urged Ghanaian companies to apply for the reduced
ECOWAS Trade Liberalisation Scheme (ETLS) tariff. However, the Minister did not
mention that the approval of goods for the scheme takes at least 2 years. Many companies simply give up applying for the scheme because they never receive an answer
from the approval committee. Examples such as this abound.
The companies state that Nigeria is the market with the strongest potential in West
Africa. However, exporting to Nigeria is currently so cumbersome that many companies prefer indirect exports through traders. Many companies also wonder why Côte
d’Ivoire has not been included in the fast track. The Ivorian market is the second
largest in the region, Ghana and Côte d’Ivoire are contiguous and the language barrier is not regarded as a problem. Integration with Nigeria is important, but integration with other countries in the sub-region is considered equally important.
Basically, the companies agree with the strategy chosen by the government for the
fast track negotiations. However, they feel that the fast track negotiations should be
extended to include central players such as Benin, Togo and Côte d’Ivoire. Ghana
should not apply for membership of UEMOA. Instead UEMOA should be absorbed
into ECOWAS. There is a need for harmonising activities and regulations so that the
same conditions and privileges will be applied to all countries in the sub-region; regardless of whether they are members of UEMOA or not.
The companies have experienced numerous problems related to high and discriminatory tariffs and the only solution to this problem is to ensure that the same regulations are used in the entire ECOWAS area. Increased competition from other companies in the sub-region is not seen as a threat to Ghanaian industry. The view is
that Ghana has the competitive advantages necessary to survive in an open subregional market.
This study identifies 5 main barriers to trade in the sub-region:
1. Red tape concerning export/import procedures
2. Lack of an intra-regional payment and clearing system
3. Road blocks and obstructive attitude of officials
4. Mistrust between economic operators in the sub-region
5. Lack of an enabling business environment for Ghanaian exports
8
This is not to say that these are the only barriers. Infrastructure and education remain barriers to development. But if trade is to increase under the fast track initiative these barriers will certainly have to be removed as a first step. The study also
identifies a number of proposals for how the barriers can be removed. These proposals and their connection to the barriers are illustrated graphically below.
1.2 5 barriers to trade and 11 ways of removing them
1. Red tape concerning
export/import procedures
1.1 Harmonisation of certification and testing procedures
1.2 Simplification of export / import procedure
1.3 Fast track application procedure for TLS tariff
2. Lack of intraregional payment and
clearing system
3. Road blocks and obstructive attitude of
officials
4. Mistrust between
economic operators in
the sub-region
2.1 Introduction of WAIPS (West African Interbank Clearance System)
3.1 . Establishment of an institution for surveillance of irregular trade practices and a sealing system
3.2 Privatisation of CEPS, payment reform
4.1 Revival of the Federation of West African
Manufacturers Association (FEWAMA)
4.2 Networking between regional trade arbitration
centres
5.1 Export financing
5. Lack of enabling
environment for Ghanaian exports
5.2 Establishment of warehouses for Ghanaian
goods
5.3 Export promotion in ECOWAS countries
Suggestions are also made for how government or donors can support the removal of
the barriers. Both are strongly urged to review them favourably.
9
1.3 Research objectives
The main objective of the study is to investigate Ghana’s potential for further economic integration with the neighbouring countries. The political implications of regional integration have been analysed in previous studies. This study is intended to
move the discussion from the political sphere to the level of the economic operators.
The main objectives of the study have been to:
-
provide a background report on regional integration
analyse the fast track negotiations between Ghana and Nigeria
clarify the Ghanaian private sector’s view on regional integration
prepare a list of proposals for how regional integration can be accelerated
prepare a final proposal for implementation by Danida
Danida has requested that the preparation of the final proposal be postponed until
the necessary internal consultations have been finalised. The final proposal will be
included in a separate report at a later stage.
1.4 Limitations
The study primarily focuses on the relation between Ghana and Nigeria. Côte
d’Ivoire has been included as it plays an important role in regional integration
through its status as the leading UEMOA country.
It has been assumed that the three main industrialised countries in West Africa;
Ghana, Nigeria and Côte d’Ivoire also have the largest potential for cross-border
trade. The other countries in the sub-region are also important for the Ghanaian
economy, but for limitation purposes, it has been necessary to restrict the fact finding mission to these three countries.
Furthermore, it has not been possible to visit all the institutions that are mentioned
in the study, as they are situated in many different countries in West Africa. Therefore, part of the information on the institutions comes from secondary sources. A list
of interviewed institutions is provided in annex 7.3.
This study primarily focuses on the economic aspects of regional integration. Therefore, ECOWAS initiatives such as the ECOMOG interventions in West Africa and
other regional initiatives that are unrelated to economic integration have been omitted.
1.5 Methodology
This study has been prepared jointly by consultants from the Association of Ghana
Industries (AGI) and the Confederation of Danish Industries (DI) in the period June
– August, 2000. The study has been sponsored by the Danish International Development Assistance (DANIDA).
10
The diagram below shows the flow in the report writing.
Desk research
First interview round (Ghana,
Nigeria, Côte d’Ivoire)
Preliminary report
writing
Second
interview
round (Ghana)
Final report and
list of proposals for
Danida
Danida reaction
to proposals
Final proposal for
implementation
by Danida
The study has been prepared partly through desk research and partly through interviews with government institutions, private sector organisations, companies and donor agencies. The interviews have been carried out in Ghana, Nigeria and Côte
d’Ivoire.
The interviews in Nigeria and Côte d’Ivoire were carried out with the assistance of
the Manufacturers Association of Nigeria (MAN) in Lagos and the Fédération Nationale des Industries et Services de Côte d’Ivoire (FNISCI) in Abidjan.
1.6 Structure of the paper
The study is arranged in five main chapters:
•
•
•
•
•
•
Chapter 1 is a general introduction to the report.
Chapter 2 gives a general economic description of the ECOWAS countries, the
different sub-regional groupings and intra-regional trade flows.
Chapter 3 gives an overview of the background, progress and achievements of
ECOWAS. A brief overview of UEMOA is also given for comparison.
Chapter 4 is a description of the Ghana-Nigeria fast track negotiations. The progress and achievements are described especially concerning the private sector.
Chapter 5 gives an overview of the Ghanaian private sectors’ view on regional integration, based on interviews with companies and institutions.
Chapter 6 is the final list of proposal for support by the Ghanaian government
and donors agencies.
11
2 Trade in West Africa
2.1 Background
Globalisation has become one of the main driving forces behind the development of
the world’s economies. The world no longer consists of autonomous areas only marginally connected by trade. Modern communication and especially the Internet has
allowed people to access information across the globe at the push of a button. Globalisation has also implied a surge in international trade. Trade in goods and services
has grown twice as fast as global GDP in the 1990s. Through international trade,
both developed and developing countries have experienced new opportunities for
growth.
Countries on all continents seek to reap the benefits of globalisation and many see
regional integration as a useful platform for attaining global competitiveness. The
establishment of communities such as the EU, NAFTA, Mercosur and APEC has
contributed to the world’s strong growth in trade and clearly shown the benefits from
increased competitiveness through economies of scale along with regional consolidation of companies’ operations.
There are other benefits associated with regional integration. Macroeconomic convergence and stability can be achieved through joint commitments acting as “lock-in”
mechanisms and “agencies of restraint” against unsound and inconsistent domestic
policies. Enhanced regional co-operation may provide governments as well as private
operators with an important networking tool. A tool that can enhance the capacity to
deal with common issues – security, health – and increase bargaining power vis-à-vis
EU and WTO.
This development is also reflected on the African continent. Post-independence Africa has seen the emergence of more than 200 regional co-operation organisations.
Many African leaders have recognised the constraints posed by fragmented markets
and the economic prospects that arise from trade with neighbouring countries and
the rest of the world. Ultimately, the rationale for economic integration in Africa is
to achieve faster growth, development and higher standards of living for the citizens.
This has lead to the establishment of communities such as the Southern African Development Co-operation (SADC), the East African Community (EAC) and in West
Africa ECOWAS and UEMOA. Despite the obvious benefits from integration these
organisations have only made little progress compared to economic communities in
the developed world. Lack of political commitment, colonial ties and competing agriculturally based products have been pointed to as the main reasons for the standstill.
Recent developments in West Africa have raised the hope that true economic integration can take place. Although ECOWAS has been able to show very little progress, regional initiatives such as UEMOA and recently the Ghana-Nigeria fast track
have increased the likelihood of a wider West African community coming into existence. This chapter gives a general economic description of the ECOWAS countries,
the different sub-regional groupings and intra-regional trade flows, with a focus on
Ghana.
12
2.2 Comparative economic study
Table 1 below provides the basic economic and social data of all ECOWAS countries.
It illustrates a region of low-income countries with an average life expectancy of 50
years. Although the population is of 224 million people, the absolute market and
trade size is less than half the size of Denmark’s.
Nigeria is by far the largest economy in the area with more than half the population
and production. The second largest countries are Côte d’Ivoire and Ghana. Ghana
has the biggest population of the two neighbouring countries, but the economy of
Côte d’Ivoire is 40% bigger than Ghana’s, resulting in a GDP/cap. of US$ 700 compared to Ghana’s 390. Senegal and Guinea follow in terms of size of the economy.
Table 1. Basic indicators for West Africa (1998)
Country
Land
Pop.
GNP/cap.
GNP
Merchan.
Merchan. Life exp. at
area
million
US$
US$
export
Imports
birth, 1997
t sq. km
mill.
US$ mill.
US$ mill.
Benin *#
111
6
380
2,280
415
613
53
Burkina Faso *#
274
11
240
2,640
307
735
44
Cape Verde
4
0
1,060
0
16
68
Cote d’Ivoire *
318
14
700
9,800
4,282
2,817
47
The Gambia
10
1
340
340
132
53
Ghana #
228
18
390
7,020
1,830
1,680
60
Guinea
246
7
540
3,780
689
1,000
46
Guinea-Bissau *
28
1
160
160
27
44
Liberia
96
3
47
Mali *#
1,220
11
250
2,750
556
811
50
Mauritania
1,025
3
410
1,230
369
380
53
Niger *#
1,267
10
190
1,900
298
424
47
Nigeria #
911
121
300
36,300
9,727
9,900
54
Senegal *
193
9
530
4,770
956
1,189
52
Sierra Leone
72
5
140
700
101
91
37
Togo *#
54
4
330
1,320
415
373
49
UEMOA
3,465
66
388
25,620
7,256
6,962
48
Ghana+Nigeria
1,139
139
312
43,320
11,557
11,580
55
Free Trade Grp.
4,065
181
300
54,210
13,548
14,536
53
ECOWAS ¤
6,057
224
336
74,340
19,320
20,013
50
Denmark
44
5
33,040
175,200
47,047
45,795
76
Notes: Countries marked with * are members of UEMOA. Countries marked with # participate in free trade negotiations with Ghana and Nigeria (Free Trade Group). ¤ The ECOWAS group is considered to be all 16 countries although Mauritania withdrew from ECOWAS in June, 2000.
Source: African Development Indicators 2000 and World Development Indicators 1999.
The UEMOA group is summarised in table 1. So is Ghana and Nigeria as well as the
“Free Trade Group” consisting of Ghana, Nigeria and the countries they have been
1
discussing free trade with at a recent meeting in Abuja . The comparison shows that
UEMOA covers only 34% of the region’s economy, while Ghana and Nigeria jointly
covers 58% and the free trade group 73%. Trade-wise, Ghana and Nigeria lead by
more than 50%, and counting the whole Free Trade Group, the trade is more than
double of the UEMOA group. This illustrates the key role that Nigeria has in the region as an economic driver and as a market. It also emphasises the importance to the
1
See section 4.1 for more information on the “Free Trade Group”.
13
whole region of the outcome of the Ghana-Nigeria fast track negotiations and the
free trade negotiations with a wider group of countries.
Table 2. Value added as a percentage of GDP in selected ECOWAS countries
Agriculture
Industry
Country
1990
1998
1990
1998
Nigeria
21
32
46
41
Côte d’Ivoire
26
25
20
23
Ghana
58
37
12
25
Burkina Faso
33
33
22
27
Benin
35
39
12
14
Togo
27
42
25
21
Source: World Development Report 1999/2000.
Manufacturing
1990
1998
8
5
13
19
8
9
16
21
8
8
8
9
Services
1990
1998
34
27
54
52
30
38
45
39
52
48
48
37
Table 2 illustrates that the manufacturing sector is relatively strongest in Côte
d’Ivoire, which poses a challenge to Ghana when trade is liberalised further. Burkina
Faso’s manufacturing sector is also relatively strong, but not so in absolute terms.
Nigeria’s manufacturing sector is relatively weak, but big in absolute terms, which is
also a challenge to Ghana’s manufacturing sector. All the countries, except for Nigeria, have a bigger agricultural than industrial output.
2.3 West African trade patterns
Intra-regional trade volumes in Africa have always been disproportionately low. Historically, colonial ties and demand for primary commodities have directed trade.
While the developed countries have been able to export processed goods, capital
goods and services to Africa, the African countries have had to rely on their mineral
and agricultural resources for access to developed markets. This pattern has been
remarkably stable. 30 years after oil was first discovered in the Niger delta, Nigeria
still relies on the about 2 million barrels of oil pumped out every day for its export
earnings and tax revenue. Along the same lines Ghana still generates most of its income from traditional exports such as cocoa and gold.
In 1997 only 9.7% of exports were intra-community in ECOWAS and 11.0% in
UEMOA. When compared to exports within the more developed trading blocks such
as the European Union and Asia Pacific Economic Co-operation (APEC), intraregional trade in West Africa is small. But it is at the same level as the Southern Africa Development Co-operation (SADC), as illustrated in table 3 below.
Table 3. Intra-regional export for selected regions (1997)
Region
ECOWAS
UEMOA
SADC
Mercosur
NAFTA
EU
APEC
Source: Ghana Statistical Services.
Intra-regional exports, % of total exports
9,7
11,0
11,4
25,4
49,1
55,4
71,9
The conclusion is that ECOWAS is just as successful as other trading blocks in Africa, but much remains to be done if the level of integration known from more developed trading blocks is to be achieved. Of course integration of markets through a free
14
trade area and a common currency is important, but they are both means to the end
of higher economic growth. The much-heralded West African market is less than 1/2
of the size of the Danish market (GDP in 1998) and the per capita purchasing power
is much lower. This is also a significant reason for the dismally low intra-regional
trade flows and the large volumes of trade with the developed countries.
Table 4 shows the development in ECOWAS trade. Imports have been depressed and
recovered over the period but with an increasing share of it being from other
ECOWAS countries. Exports have shown the same U-shape but with no clear trend
in the regional share. Overall the intra-regional trade has been around 11% with a
tendency to a slight increase in recent years.
Table 4. Structure of ECOWAS trade (US$ mill.)
Imports
Exports
Total trade
Total
IR
%
Total
IR
%
Total
IR
1992
18,501
1,808
9.9
19,188
2,180
11.4
37,689
3,988
1993
17,428
1,572
9.0
15,249
1,600
10.5
32,676
3,172
1994
13,518
1,301
9.6
12,036
1,424
11.8
25,554
2,725
1995
13,838
1,552
11.2
16,121
1,715
10.6
29,959
3,267
1996
15,631
1,882
12.0
20,345
2,316
11.4
35,976
4,198
1997
16,430
1,813
11.0
20,100
2,539
12.6
36,530
4,352
Source: ECOWAS statistics page 12. IR = Intra Regional (within ECOWAS).
%
10.7
9.7
10.7
10.9
11.7
11.9
Table 5 below highlights the small size of trade between the ECOWAS countries. In
1997 trade with EU amounted to 3-4 times intra-ECOWAS trade. The sizeable trade
with EU is to some extent explained by colonial ties. A more important reason is,
however, that Europe’s rich consumer markets provide a much higher purchasing
power for West African products than the relatively poor ECOWAS countries. Also
importantly a large part of intra-ECOWAS trade consists of oil exports from Nigeria.
Furthermore, many of the imported products – often capital goods – are not produced
in the region.
Table 5. Ecowas trade by region (1997)
Imports
Region
US$ Mill.
% of total
Central Africa
67
0.4
East Africa
21
0.1
Southern Africa
126
0.8
North Africa
187
1.1
ECOWAS
1,813
11.0
Europe
7,525
45.8
- hereof EEC
6,772
41.2
USA and Canada
2,862
17.4
Latin America
544
3.3
Japan
599
3.6
China
792
4.8
Other Asia
1,451
8.8
Total
16,430
Source: ECOWAS Handbook of International Trade 1998.
Exports
US$ Mill.
% of total
125
0.6
36
0.2
128
0.6
165
0.8
2,539
12.6
8,114
40.4
7,377
36.7
5,133
25.5
415
2.1
640
3.2
84
0.4
1,687
8.4
20,100
15
2.4 Ghanaian trade patterns
Table 5 is a reflection of each ECOWAS country’s trade patterns. However, small differences do exist as it can be seen from table 6, which describes Ghana’s trade pattern.
Table 6. Ghana trade with other regions (1999)
Imports (cif)
Exports (fob)
Region
US$ Mill.
% of total
US$ Mill.
% of total
ECOWAS
359
11.5
181
12.6
Africa (excl. ECOWAS)
138
4.4
63
4.4
The Americas
399
12.8
110
7.6
Asia incl. Middle East
593
19.0
111
7.7
EU
1,583
50.8
972
67.5
Total
3,115
1,439
Source: Ghana Statistical Service. Data converted from cedi to US$ using average 1999 exchange
rate of 2,659.23 as estimated by Economist Intelligence Unit in Country Report Ghana 1st Quarter
2000. Note: The table does not include all trading partners.
For Ghana, the largest trading partner is also Europe, which accounted for 50.8% of
imports and 67.5% of export in 1999. By contrast, ECOWAS merely accounted for
11.5% of imports and 12.6% of exports. The rising influence of imported Asian products can also be seen. Imports from low-cost, efficient Asian manufacturers will pose
a significant challenge for industry in Ghana. On the trade balance this is somewhat
compensated for by exports of primary commodities.
Table 7. Ghana’s trade with ECOWAS partners (1999)
Imports (CIF)
Exports (FOB)
Country
US$ 1,000
% of total
US$ 1,000 % of total Export rank
Benin
225
0.1
13,398
7.4
5
Burkina Faso
30
0.0
62,033
34.3
1
Côte d’Ivoire
76,805
21.4
11,279
6.2
6
Cape Verde
12
0.0
The Gambia
297
0.1
18,240
10.1
3
Guinea
167
0.0
575
0.3
11
Guinea-Bissau
2
0.0
Liberia
792
0.2
1,425
0.8
10
Mali
30
0.0
1,753
1.0
9
Mauritania
3,965
1.1
1
0.0
13
Niger
46
0.0
18,030
10.0
4
Nigeria
239,428
66.6
6,762
3.7
7
Senegal
1,577
0.4
2,134
1.2
8
Sierra Leone
226
0.1
421
0.2
12
Togo
35,796
10.0
44,700
24.7
2
Total
359,398
180,751
Source: Ghana Statistical Services.
Note: Data converted from cedi to US$ using an average 1999 exchange rate of 2,659.23 as estimated by Economist Intelligence Unit in Country Report Ghana 1st Quarter 2000.
Ghana only has three significant countries from which it imports in the region,
namely Nigeria and Côte d’Ivoire. As shown in table 8, the main imported item is petroleum products chiefly from Nigeria, which accounts for about 70% of all imports
16
from ECOWAS. Then follows electrical energy, cement clinkers and fish. The remaining 8% consist of a broad variety of products.
Table 8. Ghanaian traded products, 1999
Product
Petroleum products
Electricity
Cement clinkers
Fish
Imports
% of total
70
15
5
2
Main partner
Nigeria
Côte d’Ivoire
Côte d’Ivoire
Togo
Mauritania
Exports
Product
% of total
Wood and wood products
25
Iron and steel
Aluminium and alu. prod.
Electricity
Petroleum products
Machinery
Insecticides
Plastics and pl. prod.
Salt etc.
Oil
Textiles
20
14
10
5
3
2
2
2
2
2
Main partner
Burkina Faso
Niger, Benin
Burkina Faso
Gambia
Togo
Togo
Burkina Faso
Togo
Togo
Niger
Côte d’Ivoire
Côte d’Ivoire
Source: Ghana Statistical Services.
Ghana’s export destinations in the region are more diverse. Burkina Faso is the
main export destination. Then follow Togo, Gambia, Niger and Benin. Only then
come Côte d’Ivoire (6) and Nigeria (7) – both with a very large trade surplus towards
Ghana. The products exported by Ghana are diverse: Wood and articles thereof, iron
and steel, aluminium and articles thereof, electricity, petroleum products, machinery, insecticides, plastics and articles thereof, oil, and textiles. These products are
mainly based on Ghana’s natural resources but with an added value. They reflect the
strengths of the Ghanaian economy. There is no doubt that a further opening up of
the neighbouring markets would benefit the export.
Ghana’s exports to the region are only half the imports, which in 1999 yielded a
trade deficit with the region of US$ 179 million.
2.5 Ghana’s export to Nigeria and Côte d’Ivoire
Oil is the main traded product between Ghana and the two other relatively large industrialised countries in West Africa: Nigeria and Côte d’Ivoire. However, for
Ghana’s regional exports to take off, it is paramount that it enters the big nearby
markets of Nigeria and Côte d’Ivoire.
An analysis of Ghana’s exports to Côte d’Ivoire and Nigeria shows that the total
value of exports in 1999 was only US$ 11,3 and US$ 6,8 million, respectively. This is
equivalent to 9,9% of Ghana’s export to ECOWAS countries or 1,3% of Ghana’s total
exports.
The exports to Côte d’Ivoire in 1999 were dominated by essential oils (US$ 2,7 million), worn clothing (US$1,3 million), vehicles and parts (US$ 1,1 million), sugar and
confectioneries (US$ 0,7 million), agricultural machines (US$ 0,6 million), fish (US$
0,6 million), fibres (US$ 0,5 million), hydraulic lime (US$ 0,4 million), cotton (US$
0,3 million). The remainder of the exports is spread out on many products. It shows a
very low but rather diverse export pattern with high annual fluctuations.
17
The exports to Nigeria were dominated by aluminium plates (US$ 2,6 million) and
jet fuel (US$ 1,5 million). The remainder of the exports is spread out on many products. Exports to Nigeria are very small and concentrated on a few items with significant annual fluctuations.
Imports from Côte d’Ivoire concentrate almost exclusively (99%) on mineral fuels,
which also accounted for over 95% of imports from Nigeria.
For Nigeria, the imports from Ghana accounted for only 0.2% of all imports in 1999,
while imports from the ECOWAS area accounted for only 2%. For Côte d’Ivoire the
imports from Ghana in 1997 amounted to 0.04% of total imports, while imports from
the ECOWAS area accounted for 17% (or only 1.8% if excluding imports from Nigeria
of mainly petroleum products).
Ghana’s exports to Nigeria and Côte d’Ivoire are far more diversified than vice versa.
Furthermore, excluding oil, Ghana has a trade surplus with Côte d’Ivoire but still a
deficit with Nigeria. In connection with the Ghana-Nigeria fast track, it is important
to note that exports to Côte d’Ivoire are of approximately the same magnitude as Nigeria and that they are more diversified.
2.6 Conclusion
The main conclusion from an analysis of the trade statistics is that official trade is
small and concentrated around a few products. It is shown that Ghana has a small
export to the region, but that it is diversified in terms of countries and products. Imports to Ghana are concentrated mainly on petroleum products and on three countries only.
However, the official trade statistics often give a wrong impression of intracommunity trade flows. Many companies simply do not have any official exports.
Products are often sold to traders directly at the factories and subsequently the companies stop keeping track. Goods are then either transported across the borders in
quantities too small to be registered or they are smuggled.
According to the Manufacturers Association of Nigeria (MAN), informal trade out of
Nigeria could be as high as 90% of all exports, excluding oil. The figures for Ghana
could easily be as high. Companies in both Ghana and Nigeria are aware that traders are exporting their products to other countries, but under the present trading regime, most companies have no plans for direct exports.
Another statistical problem is related to Benin and Togo’s roles as transit countries
for Ghanaian exports. Many Ghanaian companies export to Benin and Togo, knowing that their products will ultimately be sold in Nigeria. Gilles Moisan, managing
director of the Ghanaian textile company GTP, which exports 90% of its output to
Benin and Togo, estimates that 80% of these exports end up on the Nigerian market.
He emphasises that this will not change as long as his company pays 30% tax on export to Benin and Togo and 60% on products exported directly to Nigeria.
These facts make statistics on intra-regional trade in West Africa highly uncertain.
If the highest of these estimates are correct, Ghanaian exports to Nigeria and Côte
d’Ivoire could be almost double the official figure - a significant improvement by any
18
standards. Such estimates need to be taken into account when considering the benefits of regional integration. Official trade statistics show that trade with for instance
the EU is much more important to Ghana than trade with ECOWAS. If, however, a
free trade area is created and all trade is registered, it may be revealed that intraregional trade in West Africa is much more important than what is currently believed.
Even with the statistical deficiencies it is concluded that regional trade is far too low
compared to the potential as illustrated in free trade areas around the world.
For Ghana the main targets for improved exports should be Nigeria and Côte
d’Ivoire. This is suggested by the fact that they are the two biggest economies in the
region and that they are presently not among the five main export destinations of
Ghana.
19
3 ECOWAS
3.1 Background
ECOWAS was established through the treaty of Lagos signed in May 1975 by 15
West African states. The objective was to promote trade, co-operation and selfreliance in West Africa. ECOWAS includes some of the richest countries in the world
in terms of mineral wealth and agricultural potential, but also some of the poorest
countries in Africa. Unification of West Africa through ECOWAS has always been a
daunting task given the diversity of the countries in the sub-region.
To add new momentum to the development of ECOWAS, a revised treaty for the
ECOWAS community was signed in 1993. The treaty, which was to extend economic
and political co-operation between the member states, designates the achievement of
a common market and a single currency as economic objectives. In the political
sphere it envisages establishment of a West African parliament, an economic and social council and a court of justice. At the end of 1995 the new treaty was reported to
have entered into effect after being ratified by a sufficient number of member states
(9).
ECOWAS has achieved some of its objectives concerning regional economic integration. 700 goods have been approved under the ECOWAS Trade Liberalisation
Scheme. Infrastructure development has progressed through the telecommunication
project Intelcom 1, which established communication links between the ECOWAS
capitals. The Trans-coastal and Trans-sahelian highways have improved road transport conditions in the sub-region. Financial services have also been improved
through ECOBANK. Another notable success is the abolition of visas and entry permits. All ECOWAS citizens may enter without a visa or reside in any member state
in a period of 90 days. The only requirement is a valid travel document and an international vaccination certificate.
However, high profile ECOWAS institutions as the ECOWAS FUND and the West
African Monetary Agency have never had the desired impact on economic development. Cross border trade is still so cumbersome that many companies have given up
exporting directly to the sub-region. Despite all the good intentions in the treaties,
the overall assessment is that they have had a very limited effect on regional integration. Why has this been the case?
Many reasons for ECOWAS’s lack of success can be found, but the main one is simply that member states have been unwilling to implement the ECOWAS protocols
and decisions into national law. Another reason has been a lack of emphasis on private sector involvement. Although the private sector has been identified as the main
“vehicle of growth” for the sub-region, very few ECOWAS initiatives have been taken
for creation of an enabling business environment.
The ECOWAS commission has been heavily criticised for being inefficient and lacking real links with national governments. On the other hand only few ECOWAS
member states have established ministries of regional integration and competent
bodies for implementation of ECOWAS treaties into national legislation. Thus, “the
fault is not in the Stars, dear Brutus, but in us”. The ECOWAS secretariat cannot
20
really be blamed for any lack of progress. The fault lies with the member states.
They alone have the authority to empower the secretariat and implement the initiatives that they themselves advocate for and sign during the meetings of the Heads of
State and Government.
This chapter gives an overview of the background, progress and achievements of
ECOWAS. A description of UEMOA is also given for comparison.
3.2 Structure of ECOWAS
At the apex of the ECOWAS structure is the Authority of the Heads of State and
Government. The Authority meets twice a year. Below the Authority is the Council
of Ministers, which also meets twice a year. The ECOWAS Executive Secretariat is
the implementing body of the Community. The secretariat and office of the commission has recently relocated from Lagos to Abuja, Nigeria where it is housed in an impressive newly constructed building. The secretariat is split into the following technical commissions:
• Food and Agriculture;
• Industry, Science and Technology and Energy;
• Environment and Natural Resources;
• Transport, Communications and Tourism;
• Trade, Customs, Taxation, Statistics, Money and Payments
• Political, Judicial and Legal Affairs, Regional Security and Immigration;
• Human Resources, Information, Social and Cultural Affairs; and
• Administration and Finance Commission.
Furthermore a new private sector commission is scheduled for establishment in year
2000. The secretariat is headed by Mr. Lansana Kouyaté of Guinea. The table below
shows the membership of ECOWAS.
ECOWAS member states
Cape Verde
Liberia
Benin
The Gambia
Mauritania*
Burkina Faso
Ghana
Nigeria
Côte d’Ivoire
Guinea
Sierra Leone
Guinea-Bissau
*Mauritania withdrew from ECOWAS in June 2000.
Mali
Niger
Senegal
Togo
3.3 Payment of contributions
Financial contributions by member states have always presented a large problem for
the ECOWAS budget and institutions. Proper functioning of the ECOWAS institution has been seriously hampered by a lack of funds and the resulting lack of resources to pursue and implement community programmes. Most of the member
states owe huge arrears to the various funds and community institutions.
Payments to the secretariat are a good gauge of members’ interest in the ECOWAS
project. Nevertheless, special circumstances apply in West Africa. Countries like Sierra Leone and Liberia have been engaged in civil war and other countries are so
poor that they have problems with paying even small contributions. However, some
member states do have the necessary resources for payment. If these countries are
unwilling to pay, then it will be very difficult for the ECOWAS community to function properly.
21
In July 1996, the Heads of State and Government adopted the idea for a new scheme
for contributions to the secretariat. Under the scheme each member state has to
open a special ECOWAS account in the central bank, where a 0.5% levy of imports
from non-ECOWAS countries must be placed. This should imply that payments to
ECOWAS become more or less automatic. And importantly, contributions are made
independently of the often erratic annual budget allocations of some member states.
To date Burkina Faso, Côte d’Ivoire, Ghana, Guinea, Mali, Niger, Togo, Senegal and
Nigeria have deposited their instruments of ratification with the secretariat and included the community levy in their financial acts. CEPS in Ghana started operation
of the scheme on April 15, 2000. Despite problems with initial implementation, it is
expected that the scheme will start functioning smoothly during year 2000.
The total contributions outstanding for the member states amounts to US$ 70 mil2
lion . Almost 7 times the annual ECOWAS secretariat budget of US$ 10 million.
Given the current financial status of many member states it is highly doubtful
whether these arrears will ever be settled. The general feeling among key regional
players is that timely payment of contributions is one of the main prerequisites for
proper functioning of the ECOWAS institution. ECOWAS is an ambitious project,
but if the member states are unwilling to contribute, it is certain that the ambitions
will never be fulfilled. However, if the new community levy is properly implemented
the ECOWAS secretariat may be able to start afresh.
3.4 Free movement of goods
The objective of the ECOWAS Trade Liberalisation Scheme (TLS) was to establish a
customs union among the member states over a transitional period of 15 years, starting in January 1990. The customs union was supposed to involve total elimination of
customs, duties and taxes having equivalent effect, non-tariff barriers and establishment of a common external tariff.
Unprocessed goods and handicraft products were to circulate freely within ECOWAS
if they satisfied the three following conditions:
Necessary conditions for goods to be eligible for the TLS scheme 1
(i)
originated in member states
(ii)
appeared on a list of products annexed to the decision liberalising trade in such products
(iii)
were accompanied by a certificate of origin and ECOWAS export declaration form
Tariffs on goods made by specified community enterprises were also to be abolished.
From January 1990 tariffs were lifted from 25 listed items manufactured in
ECOWAS member states, by mid-1990 the number had increased to 90. By 2000
3
more than 700 goods had been approved to benefit from the scheme .
Currently, a more liberal set of rules of origin applies. Goods must:
2
3
See annex 7.1 for a status on contributions to the ECOWAS FUND
In December 1999, 64 Ghanaian products had been approved for the scheme.
22
Necessary conditions for goods to be eligible for the TLS scheme
• be produced from materials of community origin whose value is equal to or higher than 40%
of the total costs of the raw materials employed in their production or whose quantity is equal
to or higher than 60% of the total cost of all raw material employed;
• be produced from materials of foreign or indeterminate origin whose CIF value does not exceed 60% of the total cost of materials employed or whose quantity is equal to or more than
40% of all raw materials employed in its manufacture;
• have received in the process of production a value added of at least 35% of the ex-factory price
before tax;
• be manufactured by an enterprise in which community nationals hold an equity share of at
least 25%.
According to the original TLS tariffs were to be abolished for a number of industrial
goods and for unprocessed goods. Table 9 below shows the original time frame for total abolition of tariffs on priority and non-priority industrial goods.
Table 9: 1990 plan for implementation of TLS
Ghana, Nigeria, Côte d’Ivoire, Senegal
Benin, Guinea, Liberia, Sierra Leone, Togo
Burkina Faso, Cape Verde, The Gambia,
Guinea-Bissau, Mali, Mauritania, Niger
Abolition of tariffs on
priority products
4 years
6 years
8 years
Abolition of tariffs on
non-priority products
6 years
8 years
10 years
As it can be seen from table 10 below, only Benin has eliminated tariffs on industrial
goods. More progress has been made for elimination of tariffs on unprocessed goods.
12 member states have eliminated these tariffs. Consequently, the time schedule for
implementation of the TLS has broken down completely. ECOWAS members were
also scheduled to implement a common external tariff by 2002. With the current rate
of implementation it is unlikely that this will happen.
Table 10: Status on implementation of the TLS
Countries that have
abolished tariffs according to the TLS
Unprocessed goods
Benin, Burkina Faso, Côte d’Ivoire,
Ghana, The Gambia, Guinea, Mali, Niger,
Nigeria, Senegal, Sierra Leone, Togo
Industrial products
Benin
ECOWAS FUND for Co-operation, Compensation and Development
The ECOWAS FUND was created to provide compensation and other forms of assistance to member states suffering a loss of government revenue as a result of the TLS
or establishment of community enterprises. It also has a development function
through financial contributions to projects in member states or as a guarantor of foreign investments. The authorised capital of the FUND is US$ 500 million while the
paid-up capital is US$ 84 million (1999).
A ceiling of US$ 10,4 million has been fixed for the loans, which the FUND may
grant to multinational projects. Since the commencement of its activities, the bulk of
the FUND’s loans have gone towards the financing of projects in the telecommunications and transport sector. The loans granted by the FUND as of December 31, 1999
amounted to US$ 106 million, of which 31% was allocated to telecommunications
23
projects, 29% to transport related project, 26% to rural development and industrial
projects.
The FUND is authorised to accept and manage trust funds. To this end, the FUND
manages the resources of the Special Fund for the Improvement and Development of
Telecommunications in the ECOWAS Member States and those of the Compensation
Fund within the scope of trade liberalisation. These resources amount to US$ 17 million and US$ 7,5 million respectively.
The table below shows the status on application for compensation and contributions
to the Compensation Fund within the scope of trade liberalisation. Ghana’s arrears
total US$ 220.000, to be paid-up when the community levy is implemented. Only Be4
nin has submitted an application for compensation .
Table 11: Status on compensation budget for loss of revenue
Application for compens.
Benin
Contrib. fully paid up
Burkina Faso, The Gambia, Mali
Contrib. partly paid up
Benin, Nigeria
In order to enhance its financial resources and enable it to mobilise capital on the international markets, the FUND plans to open up its capital to regional and nonregional partners. The FUND will be transformed into an ECOWAS Investment and
Development Bank, a holding company with two subsidiaries, namely:
1. The ECOWAS Regional Investment Bank – for the private sector;
2. The ECOWAS Regional Development Fund – for the public sector.
Support measures
As a part of the TLS support measures, uniform customs documents and statistical
instruments have been produced. These include certificates of origin, a customs and
statistical nomenclature based on the harmonised system (HS) and a customs declaration. Furthermore, a protocol on Inter-State Road Transit (ISRT) and a transit
guarantee mechanism have been adopted. A draft single customs document has been
prepared in collaboration with UEMOA and recommended for adoption. The document will replace the many different customs documents that are currently in use in
the member states and should speed up customs clearance procedures. The document is yet to come into use.
Table 12: Status on implementation of support measures
Certificate of origin printed and put
into use
Adoption of HS and customs declaration form
Implementation of ISRT
Designation of national organisation
to guarantee transit operations
4
Benin, Burkina Faso, Ghana, The Gambia, Guinea,
Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo
Benin, Burkina Faso, Ghana, The Gambia, Guinea,
Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo
Benin, Côte d’Ivoire, Mali, Niger and Togo
Benin, Burkina Faso, Ghana, The Gambia, Guinea,
Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo
See annex 7.1 for a status on contributions to the ECOWAS FUND
24
3.5 Status on TLS
Despite the long list of initiatives, the TLS is not working. Only one country (Benin)
has eliminated tariffs on industrial goods and though elimination of tariffs on handicrafts and unprocessed goods is a valuable first step, it will not facilitate intracommunity trade on any significant scale. The documents that were intended to
streamline customs procedures have been adopted by a substantial number of member states. But documents do not help when they are not used and economic operators still constantly report about the existence of roadblocks and harassment by gov5
ernment officials .
One of the problems with the TLS is the application procedure for companies that
wish to enter into the scheme for a reduced tariff. Even the ECOWAS secretariat
admits that the process is so cumbersome that many companies simply give up. To
be approved a company has to submit an application to the national ministry in
charge of ECOWAS affairs in two copies - one in French and one in English. The
ministry then has to submit the application to the ECOWAS secretariat for further
approval. This has to be done before February 28 every year. Applications that are
received after this date will not be processed until next year. If the applications are
approved by the secretariat they are submitted to an approval committee that meets
twice a year. Finally, the applications must be approved by the council of ministers
that meets once or twice a year. Lucky companies can expect to get their products
approved after two years of processing time.
The ECOWAS secretariat is fully aware of the cumbersome process and would like to
see the entire approval procedure delegated to the national ministries. Information
on customs bottlenecks and harassment of exports is not new to the secretariat which even conducts spot checks at border crossings and roadblocks. This is however,
of little use as the secretariat has no power to penalise member states that are not
complying with the rules. Information from the spot checks can only be used to highlight the current dismal status of the TLS.
Because of the many problems related to community rules, ECOWAS is taking steps
towards establishing a community court. This court will, according to Deputy Executive Secretary Frank Ofei of ECOWAS, be established in year 2000. ECOWAS is
presently in the process of making appointments. When the court is established,
companies encountering problems with the TLS are urged to use the court and sue
member states that refuse to fulfil their obligations.
At the March 2000 ECOWAS summit, the Heads of State and Government recognised that the procedure for approval of industrial products was a serious impediment to trade. Consequently, the ECOWAS secretariat was directed to study the
matter and identify ways of simplifying the procedure. At the same meeting Ghana
5
A Ghanaian company, Domod Ltd, recounted a situation where they participated in a trade fair
in Togo. The goods that Domod were selling were clearly duty free, but because the custom officials suddenly realised that Domod were making good sales, the company was asked to pay duty.
What is worse, after the duty was paid, the receipt that was issued indicated a much lower figure
than the actual amount paid.
25
and Nigeria were commended for the fast track initiative and a new plan of action
for ECOWAS was adopted.
The main themes of the plan of action comprise:
• free movement of persons
• a free trade zone
• compensation for loss of revenue
• regional infrastructural development.
The main recommendation regarding a free trade zone were:
• Directives to be given by the ministries of finance to customs services to apply
the 0% rate of duty on industrial products
• Ministries of finance to issue directives by April 15 to the customs services to apply the community levy of 0.5% and to remit the proceeds to the ECOWAS secretariat accounts with the central banks
• ECOWAS common external tariff to be adopted for entry into effect on January
1, 2001
The table below shows the countries participating in the Abuja meeting “the free
trade group”.
“ Free trade group” countries
Ghana
Nigeria
Mali
Benin
Togo
Burkina Faso
Niger
If these measures are implemented serious preliminary steps will be taken towards
establishing an ECOWAS free trade area. However, it still remains to be seen
whether the proposals from the meeting will materialise into concrete actions.
3.6 Status on cross border payments
One of the main challenges for accelerating regional integration in West Africa is establishment of an efficient system for cross border payments. Currently, most of the
transactions between larger companies take place via overseas accounts. Smaller
companies simply have to show up at the door and pay up front. Originally, a number of schemes were established for easing cross border payments, but currently no
properly functioning institutionalised system for cross border transactions is in
place.
WAMA
The West African Monetary Agency (WAMA) was established in 1975 as the West
African Clearing House (WACH). WACH was a multilateral payments arrangement
between all the central banks in the ECOWAS sub-region. Its principal objectives
were to encourage use of national currencies of countries of member banks for subregional trade; bring about economies in the use of foreign reserves of its members;
encourage trade liberalisation among member states; and promote monetary cooperation and consultation in the sub-region.
However, the system never received the desired level of patronage from the business
and banking sectors. The most important constraint to the proper functioning of the
arrangement was the delay in settlement of net balances and a lack of awareness on
26
the part of the business and banking community on its existence, operating procedures and advantages. In 1992 the WACH was transformed into the West African
Monetary Agency (WAMA). In 1999, seven years after the foundation of WAMA
Guinea-Bissau and Liberia still owe WACH US$ 10 million and US$ 3,5 million respectively.
Ghana was the only ECOWAS member state, which was actively using WACH until
its transformation into WAMA. Table 13 shows the transactions taking place
through WACH between September 1996 and August 1997. Ghana is well ahead of
all the other ECOWAS countries put together.
Table 13: WACH transactions from September 1996 to August 1997
Country/Group
BCEAO
Gambia
Guinea
Mauritania
Nigeria
Ghana
Amount (US$)
379,900
104,800
314,400
445,400
222,700
4,427,800
WAMA was established as a part of the efforts to enhance monetary co-operation and
financial harmonisation in the region. As a specialised agency of ECOWAS, WAMA
was to be responsible for managing an ECOWAS exchange rate system and for establishing a single monetary zone. Furthermore, WAMA was to be in charge of a
commercial credit facility that could be used by local companies. Though some progress has been achieved, the ECOWAS secretariat still complains that the system is
not functioning smoothly. Ghana is currently reluctant to use the system because of
unfavorable exchange rates for the Cedi and a permanent trade deficit with the subregion.
WAMA is also in charge of a newly circulated ECOWAS travellers’ check that should
facilitate the use of ECOWAS currencies in intra-regional trade. The travellers’
check was originally launched at the 1998 ECOWAS summit in Abuja. A move that
was described as modest, even by officials. The traveller’s check is sponsored by the
committee of governors of central banks and is initially to be managed by WAMA. In
1999 workshops and awareness programmes were conducted for banks, bureaux de
change and economic operators. Ghana put the ECOWAS travellers’ check in circulation in September 1999. According to the Bank of Ghana and ECOBANK, the travellers’ cheque is being used in steadily increasing numbers.
ECOBANK
ECOBANK is one of the most notable successes of ECOWAS. The creation of
ECOBANK stemmed from an initiative by the Federation of West African Chambers
of Commerce (FWACC) to realise the potential of the private sector to make a more
positive contribution to the development of the economies of ECOWAS. It was subsequently determined that an international class financial institution with a regional
focus was needed to ensure stable long-term growth. ECOBANK was to become West
Africa’s first international offshore bank and make modern financial services available to the sub-region through establishment of subsidiaries in all ECOWAS countries.
27
In November 1984, the Heads of State and Government resolved to give ECOBANK
their full support and to participate in its equity funding through the medium of the
ECOWAS FUND. ECOBANK was established with the broad strategic purpose of
contributing to the financial, economic, and social development of the member states
of ECOWAS as a privately sponsored, organised, and financed institution. It was envisaged that the bank could promote intra-regional trade, provide economic and
business support for industry and mobilise financial resources for investment within
the sub-region.
Today, ECOBANK is present in 11 ECOWAS countries. The Group employs over
1100 professional staff, has over US$ 500 million in total assets and does over US$ 1
billion in foreign exchange transactions annually. The bank recorded a tidy profit of
US$ 28 million in 1998. The ECOWAS FUND has an equity participation of US$ 6
million in ECOBANK, representing 11.62% of the capital.
Table 14: ECOBANK group financial highlights
US$ ‘000
1998*
1997
% change
At year end
Total Assets
655,019
558,736
Total Loans & Advances
251,852
209,647
Total Deposits
427,637
396,951
For the year
Profit Before Tax
28,160
21,628
Profit After Tax
18,792
15,201
27.2%
33.7%
Return On Average Equity
Source: ECOBANK Transnational Incorporated, *Present in 7 countries in 1998
17.2
20.1
7.7
30.2
23.6
ECOBANK is frequently described as one of the most successful private sector initiatives in West Africa. Both the ECOWAS secretariat and the World Bank place great
emphasis on its achievements when describing the future role of the private sector.
ECOBANK offers a wide range of accounts to its customers, but despite its presence
in 11 ECOWAS countries there is still one facility that is lacking – an efficient system for cross border payments.
Companies do have the possibility of conducting cross border transactions via
ECOBANK. But both Ghanaian and Nigerian companies complain that the system is
so slow that it is of little practical use. ECOBANK and 50 other banks in the subregion have developed a system for interbank payment (WAIPS). The system was to
have been introduced in August 2000. However, the launch was postponed indefi6
nitely because the central banks were unable to support the scheme .
3.7 Infrastructure
Some measure of infrastructural development has also been achieved by ECOWAS.
This is important as integration of markets necessitates efficient communication and
transport facilities. However, interviews with private sector operators reveal that infrastructure remains one of the main barriers to economic integration. Sometimes
6
See chapter 6 (2.1) for more information.
28
Ghanaian companies actually have to transport products to Côte d’Ivoire in order to
use the railway line linking Abidjan with Ouagadougou.
West African Gas pipeline project
In 1995 Nigeria, Ghana, Togo and Benin signed an agreement for the construction of
a 400-km gas pipeline to connect Nigerian gas supplies to the other countries. It is
envisaged that the pipeline will provide secure low cost energy supplies to the region.
In mid-1998 ECOWAS announced that construction of the US$ 693 million pipeline
project was to commence later in the year, but the project is still in a development
phase.
Recently, the steering committee for the project has decided to (i) create a four member implementation committee and allocate funds for its operation; (ii) involve the
private sector in the project by associating the commercial group composed of Chevron, Shell, NNPC, GNPC, SOBEGAZ and SOTOGAS; (iii) to conduct a study on the
feasibility of the project. In the study it was concluded that the project was technically feasible and could be implemented using a fast track approach. The first gas
delivery should become possible by January 1, 2004.
Roads and transport
ECOWAS has achieved some measure of success in infrastructural development.
Concerning road transport ECOWAS has completed 83% (or 3800 km out of 4566
km) of the Trans-coastal highway and 88% (or 3924 out of 4460 km) of the TransSahelian highway. ECOWAS has also facilitated a brown card scheme that provides
third party liability insurance throughout the region. Furthermore, ECOWAS is
planning to establish a regional airline (ECOAIR) and a coastal shipping company.
Discussions have also been held on the preparation of a regional railway master
plan. During a meeting in Abuja in February 2000, 7 ECOWAS member states expressed their interests in establishing a regional railway. A feasibility study is under
way for construction of an Accra-Lagos railway line passing through Cotounou and
Lomé.
Telecommunications
In 1996 the initial phase of a programme to improve regional telecommunications
(Intelcom I) was completed. Intelcom 1 represents a significant achievement for infrastructure in ECOWAS, as it has inter-linked all the sixteen ECOWAS capitals
through a system of telephone, telex and telefax facilities.
Intelcom II is an ECOWAS priority programme under which the present analogue
microwave system will be replaced with a digital radio system. Implementation of
the Intelcom II programme has been delayed due to changes within the technical
sponsor.
3.8 Private sector initiatives
The 1975 treaty of Lagos mentions promotion of the private sector as the key to
growth in the sub-region. According to Frank Ofei, much has already been done, but
new initiatives are readily welcomed. The ECOWAS secretariat is gearing its own
private sector efforts through establishment of a new commission that will take care
29
of all matters related to the private sector. The existing industrial unit will be incorporated into this new unit.
On a sub-regional scale the secretariat is working with the national investment promotion agencies to promote the West African Investment Promotion Agency
(WAIPA). The statutes for this agency have already been drafted. A databank is being established, which will chart business opportunities in the sub-region and specify
the needs of the private sector. This system will be used to facilitate contacts at the
ECOWAS trade fairs of which two have already been held – one in Senegal in 1995
and another in Ghana in 1999. Other initiatives for investment and trade promotion
include interaction with the European Union through a biannual industrial forum.
Along the same lines, investment and trade contacts are being established with the
United States.
The secretariat was active in the establishment of the presently moribund Federation of West African Manufacturers Association (FEWAMA). According to Frank
Ofei, the association had a basic problem related to the fact that many ECOWAS
countries were too small to harbour industrial associations. To facilitate further integration of industry in the sub-region they have instead supported the West African
Enterprise Network (WAEN). FEWAMA and other institutions have only been
granted observer status at the relevant community meetings. If they are revived, the
secretariat welcomes initiatives from these institutions and foresees that they will
play an enhanced role in community affairs.
Access to cheaper credit is also high on the agenda for the secretariat, as this strikes
right at the heart of the main obstacle for industrial development in the sub-region.
Accordingly, the ECOWAS FUND is being restructured so that it can facilitate loans
to the private sector through multilateral agencies such as the African Development
Bank and the World Bank. Credit can be given at a lower interest rate as the FUND
can cover some of the risks through concessional loans from donors.
One of the main projects that ECOWAS has undertaken for private sector promotion
is the preparation of an Industrial Master Plan. The master plan - a 250 page document based on industrial censuses from most of the member countries - identifies
constraints and obstacles to industrial development in the sub-region, assesses the
assets and resources and proposes an action programme to be taken to promote industrial development in West Africa. However, despite all the good intentions of the
master plan it has never been implemented. The head of the industrial unit at
ECOWAS, Mr. Limane Barage, laments the total lack of action, but hopes that the
plan can be used to promote industry in the future.
Other initiatives that have an effect on the private sector are related to the free
movement of goods and people, payments, infrastructure development and a common
currency.
3.9 UEMOA
The establishment of UEMOA was a major development in the institutional arrangements for economic integration in West Africa. The initial decision was taken
in 1991 in the form of a directive to BCEAO to study the possibility of extending the
UEMOA beyond a monetary union. Subsequently, in January 1994 a new treaty was
30
drafted, signed and later ratified by the then seven member states (Guinea-Bissau
joined in May 1997).
Reasons for the creation of UEMOA abound, but it was mainly a response to members’ wishes to make their markets more attractive to foreign investors. The challenge was to create a unified market within ECOWAS with 67 millions citizens.
UEMOA comprises 34% of the ECOWAS market. Moreover, there was a feeling that
the potential of the already existing CFA franc monetary union was not being fully
exploited. Growth and economic stability could be achieved through increased trade
between the members of the monetary union and increased harmonisation of public
finance, external payments and debt.
The objective of UEMOA is to strengthen the common monetary policy of the BCEAO
by means of economic integration. According to article 4 of the UEMOA treaty the
main objectives are:
• strengthening the economic and financial competitiveness of the members states
within an open and competitive environment
• harmonising macroeconomic policies through a process of surveillance
• establishing a common market characterised by the free movement of persons,
goods, services, capital and a common external tariff
• co-ordinating sectoral policies through joint activities
• harmonising legislative and regulatory policies
The treaty also allows for a large degree of supra-nationality. Already, the monetary
policy is controlled by BCEAO. UEMOA acts are directly enforceable in the legislation of member countries, irrespective of any contrary national legislation. The executive branch of UEMOA - the commission - is responsible for multilateral surveillance of economic policies and harmonisation of legislative and regulatory polices. All
regulations, directives, and decisions of the commission are binding on all members
eliminating the issue of ratification by member states. A process that has seriously
hampered the harmonisation of policies within ECOWAS. The table below shows the
membership of UEMOA
UEMOA member states
Benin
Burkina Faso
Côte d’Ivoire
Guinea-Bissau
Mali
Niger
Senegal
Togo
The private sector has been given a significant voice in the development of UMEOA.
By establishing the Regional Consultative Chamber, UEMOA has created a body
where private sector associations are consulted on development within the union.
This body acts as a channel of communication between the commission and the private sector.
Altogether the UEMOA treaty and institutional framework provides a solid foundation for accelerated economic integration. Member states have deposited many previously exclusive national decision rights with the commission and UEMOA legislation
takes precedence over national legislation. Monetary policy is already in the hands of
the BCEAO.
31
Achievements of UEMOA
UEMOA has effectively only existed for half a decade. Despite the relatively short
time span the achievements are substantial. Apart from the already existing common currency, a customs union has been established and internal tariffs are being
reduced. The Abidjan stock exchange has been extended to include all the UEMOA
countries and new regional initiatives are constantly being prepared and implemented. The UEMOA commission headquarters in Ouagadougou, Burkina Faso is
described as a dynamic institution with qualified and determined staff.
A stable and convertible common currency has provided considerable benefits to the
members of UEMOA. The general perception is that the CFA franc scheme is heavily
dependent on the French treasury and central bank and would not exist without
their interventions. However, according to the BCEAO this is not true. The main
reason for the success of the CFA franc is the discipline that the member states have
imposed on themselves. Nevertheless, CFA francs are freely convertible into French
franc, at a fixed rate, through an operations account established by agreements concluded between the French treasury and the BCEAO. It is fully backed by the French
treasury, which also provided the BCEAO with overdraft facilities. The BCEAO is
authorised to hold 35% of its foreign exchange holdings in other currencies than
French franc and exchange is effected on the Paris market.
UEMOA has also made significant progress within implementation of a free trade
regime. Already from June, 1996 there was a 30% reduction of tariffs on eligible industrial product (5% on non-eligible products). In January 2000 a customs union was
created with a five-band system of tariffs ranging from 0% to 20% along with a common external tariff. These tariffs will be reduced until trade becomes completely free
within UEMOA in 2003. To strengthen UEMOA’s capacity to promote economic integration a community solidarity tax of 0.5% was imposed on all goods from third
countries sold within the community. This tax will provide a means of financing initiatives that can smoothen the process of economic integration.
With the extension of the Abidjan stock exchange to encompass all the UEMOA
countries steps have been taken towards integration of capital markets. Though
relatively insignificant in size (market capitalisation US$1,8 billion in 1998), it will
still provide an important step towards mobilising portfolio investments in the
UEMOA sub-region, as most of the UEMOA countries are too small to host independent stock markets. The Abidjan stock exchange still mainly comprises Ivorian
enterprises - there is only one non-Ivorian company listed on the stock exchange. But
trading can be done at the stock exchange through local offices that have been established in all the UEMOA countries. According to Mr. Tidiane Bah, Head of the Abidjan stock exchange, integration with the stock exchanges in Ghana and Nigeria is
easy from a technical point of view. It is also necessary if foreign investments are to
start flowing into the region.
The UEMOA commission has formulated programmes on food security, increased agricultural productivity, and enhanced functioning of agricultural produce markets.
Six sub-programmes are at the implementation stage. A common agricultural policy
is being prepared along with policies for organisation of competition within the union, establishment of support systems for enterprises and co-ordination of industrial
and other sectoral policies.
32
France, the World Bank and the European Union have supported UEMOA heavily.
The World Bank has worked closely with the UEMOA commission on a common external tariff and sub-regional policy issues such as an investment code, competition
policy and macroeconomic convergence criteria. Credit lines have been established to
BOAD along with a technical assistance credit to the BCEAO.
3.10 Comparison of ECOWAS and UEMOA selected areas
Area
Headquarters
ECOWAS
Secretariat, Abuja, Nigeria
UEMOA
Commission, Ouagadougou, Burkina
Faso
Approx. US$ 15 mill., 1999
Budget
Approx. US$ 10 mill., 1998
Common currency
Plans from 1993 never implemented
Common external
Tariff
Common
industrial policy
Free trade
To be established in January 2002
Since 1945, BCEAO common central
bank
From January 1, 2000
Agreed, but never implemented
Agreed
ETLS, generally not working
Financing of
Secretariat
Compensation
Mechanism
Private sector
Allocation through budgets of members states
0.5% of imports from third countries
(recently implemented by Ghana)
Observer status
Free trade in 2003. Tariffs currently
being reduced
0.5% of imports from third countries
Common legislation
Stock exchanges
Generally not integrated into national law
Contacts
established
between
Ghana, Nigeria and Côte d’Ivoire
0.5% of imports from third countries
Permanent communication through
consultative chamber
Efficient integration into national
law
Full integration from 1998
When comparing the two regimes it would appear that UEMOA has succeeded in all
the areas where ECOWAS has failed. UEMOA has succeeded in funding the secretariat, establishing a free trade area with a common external tariff and members
willingly implement the UEMOA treaties. UEMOA has also succeeded in creating a
common industrial policy and industry has been successfully consulted during the
formulation stage.
Many of the rules that regulate ECOWAS and UEMOA are the same. Hardly a surprise given that the UEMOA countries have participated in the formulation of the
objectives and programmes of both communities. UEMOA has been able to learn
from the mistakes of ECOWAS and correct them when formulating the UEMOA
treaties. Because of the similarities between the two communities, the ECOWAS secretariat has had large misgivings about UEMOA. In 1994 the ECOWAS secretariat
prepared a memorandum entitled an “Analysis of the UEMOA Treaty”. The conclusion of the analysis was that, given the similarities between the two communities,
the creation of UEMOA became something of a mystery.
It is important to note that the UEMOA countries have implemented the ECOWAS
treaties at the same rate as the non-UEMOA countries. The blame for lack of implementation cannot solely be placed on them. The UEMOA countries may have placed
33
more emphasis on implementing their own treaties, but regarding ECOWAS they
are no worse than the rest.
Why has UEMOA succeeded where ECOWAS has failed? There appears to be three
main reasons. Firstly, the UEMOA countries have had a common currency since
1945. The BCEAO has proven that it is a well-organised institution and coordination of economic policies within the CFA franc zone has been successful. Secondly, the leaders of the UEMOA countries have shown the political commitment
that is vital for successful implementation of the UEMOA treaties. This factor has
been augmented by political pressure from France. Thirdly, external donors, including France, have been very supportive of the UEMOA project. There are of course
also other reasons for the successful integration of UEMOA, but the ones mentioned
here have certainly added momentum to the integration effort.
The lessons from integration between the UEMOA countries cannot be transferred
directly to ECOWAS. Nevertheless, ECOWAS can learn a lot from the rapid development of UEMOA. Regional integration in West Africa is not unattainable. With
adequate political commitment, understanding for the reality on the ground and external assistance, it is possible to create an economic and monetary community in
West Africa.
3.11 Conclusion
25 years after the signing of the ECOWAS treaty, it can be concluded that the
ECOWAS community has only made small contributions to regional economic integration. Intra-regional trade is still low compared to standards in the industrialised
countries and the TLS is not working. The ECOWAS FUND is under restructuring
and the countries in the region seldom use WAMA.
The ECOWAS secretariat is desperately trying to revive community programmes
and initiate new ones. But they do not receive much support from the member states.
ECOWAS has had to struggle with many problems; Lack of commitment from the
Heads of State and Government, a permanent lack of funds and a general unwillingness to implement the ECOWAS treaties into national law.
Even though the main part of the 1975 and 1993 treaties have never been implemented at the national level, progress has been made in selected areas. Basic community infrastructure has been developed and ECOBANK provides banking services
to economic operators in the sub-region. ECOWAS citizens are also allowed a 90 day
stay in other countries in the community without a visa. Although these achievements have contributed to economic development in the sub-region, they are only
small steps towards an integrated community.
Despite the limited economic size of the West African market, two major trading
blocks currently exist in the region – ECOWAS and UMEOA. The main reasons for
establishment of UEMOA can be found in the glaring lack of progress within the
ECOWAS structure. The ECOWAS secretariat has had large misgivings about the
UEMOA block, as the objectives and programmes of the two communities are essentially the same. Nevertheless, ECOWAS can learn many important lessons from the
UEMOA integration process that has succeeded in many of the areas where
ECOWAS has failed.
34
The current hope of the Heads of State and Government is that UEMOA and the
Ghana-Nigeria fast track will be united within the ECOWAS structure by 2004. This
may be ambitious, but there is little doubt, that UEMOA has added substantial impetus to the process of regional integration in West Africa.
35
4 The Ghana-Nigeria fast track
4.1 Background
The main rationale for the Ghana-Nigeria fast track can be found in the failure of
ECOWAS and the establishment and success of the UEMOA block. The establishment of UMEOA meant that Ghana and Nigeria were de facto left out of regional
economic integration. It has never been publicly stated that Nigeria was unwelcome
as a UEMOA country. However, the conditions of the UEMOA treaty and especially
the surrendering of sovereignty to French dominated institutions left little room for
Nigeria. Nigeria’s ambition to become a regional superpower is difficult to unite with
the French dominance in UEMOA.
Ghana, on the other hand, had a possibility of joining UEMOA either as a full member, including adoption of the CFA franc, or as an associated member. Why has
Ghana never opted to join UEMOA? One reason for this can be found in the colonial
spilt between former French and British colonies in West Africa and the resulting
split between anglophone and francophone countries. Furthermore, Ghana has
pledged allegiance to both Nigeria and overall ECOWAS integration. If Ghana was to
join UEMOA, Nigeria would risk regional marginalisation, which could have detrimental effects on the Obasanjo governments’ efforts to keep the country stable.
Moreover, there is a cost factor involved in joining UEMOA. Apart from the loss of
economic sovereignty, there are substantial financial cost associated with membership and adoption of the CFA franc. There would be a contribution through a membership fee to the BCEAO, which in the case of Ghana would amount to US$ 168 million. Furthermore, a contribution of US$ 22,3 million would have to be made to
BOAD, the UEMOA development bank. There would be yet another contribution to
the solidarity fund. Altogether, Ghana would have to contribute approximately US$
200 million for membership. According to the World Bank, the subscription for Nigeria would amount to approximately US$ 1 billion. Given the current budget deficits
it is unlikely that the two countries would be willing to make such a significant contribution.
It is important to emphasise that the Ghana-Nigeria fast track is an ECOWAS initiative. The ECOWAS secretariat fully supports the negotiations and other
ECOWAS countries are encouraged to join. Presently, Guinea, Liberia, Sierra Leone
and The Gambia have joined the negotiations for a second monetary zone (SMZ). Benin, Togo, Mali, Burkina Faso and Niger are involved in the establishment of a free
trade area. A vital inclusion given that Benin and Togo separate Ghana and Nigeria
and the other countries constitute Ghana’s largest export markets in the sub-region.
Should they choose to do so, all the UEMOA members are welcome to join, but it is
more likely that UEMOA and the fast track countries will merge later, within the
ECOWAS framework.
As shown in the table below, the fast track negotiations have provided the basis for a
plethora of regional groupings.
36
Different groupings in ECOWAS
ECOWAS
Ghana, Nigeria, Mali, Burkina Faso, Niger, Benin, Togo, Liberia, Sierra Leone, the Gambia, Guinea, Cape Verde, Guinea-Bissau, Côte
d’Ivoire, Senegal
Negotiations for SMZ
Ghana, Nigeria, Liberia, Sierra Leone, the Gambia and Guinea
Fast track for free trade Ghana, Nigeria
Free trade group
Ghana, Nigeria, Mali, Burkina Faso, Niger, Benin and Togo
UEMOA
Mali, Burkina Faso, Niger, Benin, Togo, Guinea-Bissau, Côte d’Ivoire,
Senegal
4.2 The fast track
The Ghana-Nigeria fast track approach was initiated in Lomé, Togo in December
1999 through a speech by President Obasanjo of Nigeria. In the speech West African
leaders were urged to adopt a two-track approach in the implementation of all
agreed sub-regional programmes of integration. Basically, the idea was that when
two or more member states were ready to implement a particular ECOWAS programme they should be encouraged to do so. This would then be regarded as the fast
track to which the slower track could join later.
As co-signatories of the Bamako declaration of January 28-29, 2000, the UEMOA
countries have endorsed the principle of variable geometry and agreed to the ultimate goal of monetary integration with the fast track countries by 2004. UEMOA
member states have also been urged to continue implementation of the TLS. To
speed up trade integration between the two regional trade blocks, the executive secretary of ECOWAS and President of UEMOA have been asked to “take all necessary
measures to finalise the on-going consultations on the harmonisation of their instruments for trade liberalisation”.
Thus, there is no real conflict between the two organisations. They are rather regarded as separate pillars that should be joined as soon as possible. At the Bamako
meeting, the Heads of State and Government also approved of the initiative taken by
Ghana and Nigeria within free trade, implementation of a regional infrastructure
development programme and support for the private sector. The declaration urged
Ghana and Nigeria to move on with fast track negotiations and also urged other
countries in the sub-region to join.
Both Ghana and Nigeria have shown ample proof of their commitment to the fasttrack negotiations. At the very top the Presidents have consistently advocated for an
accelerated integration process and have personally attended a number of high-level
summits to show their support. This commitment has also been reflected at the
lower levels of administration from ministers to civil servants. Relevant ministers
attend meetings along with the key government institutions and large delegations
are sent for the negotiations. Involvement of the private sector is seen as very important to the whole process and some of the leading organisations have been invited to
participate. Altogether, the negotiations reflect a commitment and pace that has
never before been seen in the ECOWAS context.
At the first fast track economic co-operation meeting in Accra on December 20-21,
1999 – only 10 days after President Obasanjo’s Lomé speech – it was decided to set
up two technical committees to work out the strategies for establishing a SMZ and a
37
free trade area. These technical committees form the basis for negotiations at the
practical level. The fast track approach will primarily deal with five areas:
• Monetary Union
• Free Trade Area
• Free Movement of Persons
• A Regional Investment Infrastructure Programme
• Regional Private Sector Investment Promotion.
In the following sections an overview of the fast track is given. The political commitment of Ghana and Nigeria is analysed and the initiatives and discussions of the
working committees are reviewed. Furthermore, an overview of donor policies and
initiatives is given.
4.3 Policies on regional integration
Ghana’s policy on regional integration
Historically, Ghana has been leading Pan-Africanism. Especially Kwame Nkrumah,
the first president of Ghana, was powerful advocate of African unity until he was
overthrown in 1966. His legacy has to a certain extent guided Ghana’s policies on regional integration. Consequently, Ghana has always been a leading country in
ECOWAS and stands as one of the critical players for further regional integration in
West Africa. According to the government of Ghana the ECOWAS community remains the only viable framework for economic integration and progress in the West
African sub-region. This is reflected in article 40 of the 1992 Ghana constitution,
which adheres to the principles of the treaty establishing ECOWAS.
Ghana was among the first ECOWAS countries to liberalise trade in industrial
products in 1996. Apart from Ghana, only a few states are applying the reduced tariffs as the cardinal principle of reciprocity, which is crucial for successful implementation of the scheme. Ghana’s two-year chairmanship of ECOWAS in 1995-1996
demonstrated the country’s commitment to West African integration. President
Jerry Rawlings constantly advocated for the advantages of ECOWAS, but also highlighted the obstacles, which had prevented the community from reaching its objectives.
At a summit of Heads of State and Government of The Gambia, Ghana, Guinea, Liberia, Mali, Nigeria and Sierra Leone held in Accra in April 2000, President
Rawlings reconfirmed Ghana’s commitment to the fast track. He also gave Ghana’s
rationale for entering the negotiations. “What is required is innovative and practical
strategies for attaining the goals of integration. It is in furtherance of this objective
that Ghana and Nigeria initiated the fast track approach shortly after the Lomé
summit”. In the speech President Rawlings also re-confirmed Ghana’s commitment
to the fast track approach as a means of attaining monetary integration in the subregion.
At the government level the co-ordination and progress in the integration effort is
discussed at bi-weekly meetings, chaired by Vice-President Mills. The involved ministers have to attend personally and account for the progress made. Ghana has recently created a ministry of regional integration in accordance with ECOWAS direc-
38
tives. Minister of local government Kwamena Ahwoi was appointed to a new noncabinet position as a minister of planning and regional economic co-operation. This
new position was, according to some observers, best described as “a glorified liaison
officer with ECOWAS” and the ministry is not adequately staffed for its tasks. But
along with the increasing importance of fast track negotiations, it is believed that the
ministry will be able to gather an increasing amount of clout.
There is little doubt about Ghana’s political commitment to economic integration and
the fast track negotiations with Nigeria. But, Ghana is confronting tough negotiations. Nigeria is the economic powerhouse of the sub-region and is renowned for its
red tape and corruption. Ghana will have to strike a deal with Nigeria that ensures
insulation from the maladies of the Nigerian system.
Nigeria’s policy on regional integration
As the co-initiator of ECOWAS along with Togo, Nigeria has historically proven its
commitment to regional integration. Right from its inauguration Nigeria has taken a
leading role in ECOWAS matters. Nigeria perceives the West African community as
a useful vehicle for advancing the long-term aim of diversifying from an increasing
dependence on oil exports. Despite the largest home market in West Africa, Nigeria
still needs the West African market for oil- and non-traditional exports.
Over the years changing Nigerian leaders have demonstrated commitment to the
ECOWAS agenda. ECOWAS is mentioned as a top priority for government in Nigeria’s vision 2010. However, the military rule and perpetual instability of the country
have kept many ECOWAS members away from further integration. As the managing
director of a Ghanaian company stated “Nigeria is chaotic and Ghana is vulnerable”.
Nigeria’s main contribution to ECOWAS has been through military interventions in
Liberia and Sierra Leone, where Nigerian armed forces constituted the bulk of the
ECOMOG forces.
The death of military ruler Sani Abacha in 1998 opened the way for a shift in regional politics. His successor, General Abdulsalami Abubakar, favoured a lower profile in the region and a less dominant role in ECOWAS. At the Abuja summit in 1998
he gave up the chairmanship of ECOWAS to General Gnassingbé Eyadéma of Togo.
Later it was agreed to hand over the chairmanship to the present ECOWAS chairman Mali’s President Alpha Oumar Konaré.
Recently, the democratically elected President Obasanjo demonstrated Nigeria’s renewed commitment to the ECOWAS agenda by exclaiming his frustration with the
lack of progress with implementation of the ECOWAS treaty. It was his Lomé speech
in December 1999 that originally charted out a new strategy for acceleration of regional integration. He stated that Nigeria intended to join the fast track in several
different areas, namely: free movement of people through removal of border formalities, supporting the ECOWAS free trade zone and creating a SMZ outside the CFA
franc zone in order to join the two currencies later.
President Obasanjo has repeatedly demonstrated his commitment to the integration
effort. He has personally attended high-level talks with Ghana and the other countries participating in the fast track negotiations. Recently, Nigeria has created a
“Ministry of African Integration” that will take care of matters related to ECOWAS
39
in co-operation with the other relevant ministries. This will ensure that regional polices are incorporated into all aspects of national policies and that they are implemented according to plan.
To summarise, the facts strongly suggest that Nigeria is committed to the GhanaNigeria fast track. However, the sheer size of Nigeria compared to the other West Africa countries will still pose a challenge for integration. Nigeria will have to give up a
disproportional amount of influence on the development of a common market. Otherwise the other countries in the region will be reluctant to join. It still remains to be
seen if Nigeria is willing to make such sacrifices.
UEMOA participation
As mentioned in section 2.2 several UEMOA countries participated in a meeting on
establishment of a free trade area with Ghana and Nigeria in March 2000. This free
trade group does not participate directly in the fast track negotiations, but their inclusion in the negotiations is very important for Ghana, as they comprise the largest
export markets for Ghanaian goods. Unfortunately, the main industrialised countries in UEMOA – Côte d’Ivoire and Senegal did not participate in the free trade negotiations. The free trade group’s interest in the free trade zone promises well for the
future negotiations on a merger between the fast track countries and UEMOA. However, there seem to be several inconsistencies in the negotiations.
Firstly, all the UEMOA members already charge a 0.5% levy on imports from third
countries for payment of contributions to the UEMOA commission. At the March
meeting these countries were also urged to implement another levy of 0.5% for payment to the ECOWAS secretariat. Does this mean that UEMOA members have to
charge two levies, one for the UEMOA Commission and one for the ECOWAS secretariat?
Secondly the members states were urged to implement the common ECOWAS external tariff by January 2001. The UEMOA countries have already established a common external tariff from January 2000. Does this mean that the participating countries are to have two external tariffs? It remains to be clarified how the free trade
group intends to overcome this overlap.
Why has this change come about? A few years ago the francophone countries would
have been much more reluctant to enter into direct negotiations with Ghana and Nigeria. Firstly, the democratisation of Nigeria has been a significant factor. Nigeria is
altogether less scary now than under the previous military rule. Furthermore, President Obasanjo is actively encouraging the UEMOA countries to join. During a recent
visit to Paris, President Obasanjo stressed the need for francophone co-operation in
uniting ECOWAS. Secondly, the joint visit of the foreign ministers of Britain and
France to Accra and Abidjan has played a role. The two former colonial powers are
now trying to foster unity between the countries in Western Africa.
4.4 Monetary integration
Why does West Africa need a Second Monetary Zone (SMZ)? In fact there is a long
list of reasons. Intra-regional trade is at an extremely low level, cross border payments are close to impossible and currencies of ECOWAS members are not accepted
as legal tender in other countries in the sub-region (except for the CFA franc). A
40
common currency can become a significant factor in the alleviation of such problems.
Fiscal austerity is of equal importance. Entering into a stable monetary arrangement
will entail a fundamental change in government spending policies. Ghana has consistently run an increasingly large budget deficit since 1996 and Nigeria since 1997
(see table 15). Both countries will have to strengthen financial discipline and develop
new sources of revenue if they wish to establish a viable monetary zone.
Six countries are participating in the negotiations for a SMZ namely, Ghana, Nigeria, Guinea, Liberia, Sierra Leone and The Gambia. All six countries are members of
ECOWAS, but not of UEMOA. Given the size of the economies and the political stability of the participating countries it is only natural that Ghana and Nigeria should
constitute the driving force of the fast track negotiations. Only Guinea with a GDP of
US$ 3780 million in 1998 (roughly half of Ghana) has an economy of a size that can
have a potential impact on the development of the SMZ. Therefore, Ghana and Nigeria will set the agenda for the current and future negotiations and will ultimately
decide on the design of the SMZ.
7
The countries participating in the SMZ have agreed on a set of convergence criteria
that have to be fulfilled if closer monetary co-operation is to be possible. The six
countries participating in SMZ have agreed to undertake concerted action into the
following quantitative primary convergence criteria:
Primary convergence criteria for SMZ
1. Single digit inflation rate by the year 2000 and 5% by 2003
2. Gross external reserves to cover at least three months imports by 2000 and 6 months by 2003
3. Central bank financing of budget deficit to be limited to 10% of previous year’s tax revenue
4. Budget deficit (excluding grants) to GDP ratio of not more than 5% by 2000 and 4% by 2002
If a SMZ can provide a viable alternative to the CFA franc zone then the ultimate
result could be a unification of the two main currencies in the region. A move that
would fulfil the vision of the 1975 ECOWAS treaty, which mentions the establishment of a West African monetary zone. It will be much easier for the CFA franc
countries to unite with a SMZ where all participating countries obey the necessary
fiscal discipline instead of six individual countries. In the Bamako declaration it is
envisaged that the two monetary systems will unite in 2004.
What only few people in Ghana have realised is that compliance with the convergence criteria will have a very significant impact on economic policy. Effectively governments will hand over monetary policy to a regional central bank and fiscal policy
will have to conform to a series of exogenous targets. Both income and expenditure
will have to be reined in.
Compliance with the convergence criteria will have to constitute the guiding principles in both Ghana and Nigeria’s economic policy. However, it still remains to be
seen if the two countries are able to restructure their economic policies in an appro-
7
Convergence criteria are a set of macroeconomic indicators that countries entering into a common economic and monetary arrangement are required to satisfy to reduce the negative externalities that may arise from asymmetry in economic policies.
41
priate way. None of the countries are known for financial austerity and Ghana has a
record of heavy spending in election years. Nigeria on the other hand has consistently squandered its large earning from oil exports. However, both countries have
shown a genuine willingness to engage themselves in regional integration. Table 15
shows the development in the four main convergence criteria for Ghana and Nigeria.
Table 15: Convergence indicators for Ghana and Nigeria 1994-1999
1994
1995
1996
1997
1998
1999
Target
Target
Inflation rate
2000
2003
Ghana
34.2
70.8
32.7
20.8
15.7
est. 13,8
1. digit
5%
Nigeria
57.0
72.8
29.3
8.5
10.0
8.0
1. digit
5%
Reserves/Imports ratio (Months)
Ghana
4.1
4.5
3.4
2.6
1.9
1.6
3
6
Nigeria
3.0
2.1
7.6
9.6
7.9
est. 6.4
3
6
Central Bank financing (% of previous years tax revenue)
Ghana
107
17.5
-34.6
13
56.7
147.7
10%
10%
Nigeria
16.0
0.0
0.0
8.1
10%
10%
Budget deficit (excluding grants) to GDP ratio
2002
Ghana
2.2
0.9
-3.0
-2.1 (-8.3)
-2.0 (-6.3)
-3.1 (-6.5)
5%
4%
Nigeria
-7.7
0.1
1.3
-0.2
-4.7
-7.6
5%
%
Source: Report from Technical Committee on SMZ, Bank of Ghana and Central Bank of Nigeria.
Number in brackets denotes budget deficit excluding grants.
Currently, Ghana does not qualify for the SMZ on any of the convergence criteria.
Under the present economic conditions, even the Bank of Ghana doubts the possibilities for meeting the targets on time. It will probably only be possible to fulfil them if
the prices for Ghana’s main export items, cocoa and gold, increase significantly. The
figures are better for Nigeria. Inflation has been brought down to single digits in
1999. And though foreign reserves have deteriorated since 1997 they are still within
the target for 2000. On the other hand the budget position has been deteriorating
from a 1.3% surplus in 1996 to a 7.6% deficit in 1999. Though revenue policies in Nigeria are becoming more focused, though introduction of VAT and an increase in petrol prices there is still a long way to go.
4.5 Creation of a free trade area
All countries in the sub-region stand to benefit from a free trade area. Given the limited size of most West African countries, local industry only has a limited potential
for growth without trade. Access to the entire West African market and especially
Nigeria can, to a certain extent, solve this problem. Currently, products are often
imported from outside the sub-region - even if a company in another ECOWAS country produces the same product. This can be changed through free trade.
Products are not necessarily imported from third countries because locally manufactured products are fundamentally un-competitive. Often the reason is simply that
cost of freight, insurance and red tape prolong delivery times to an extent where it
becomes faster and cheaper to import from Europe or Asia. In the process of interviewing companies the consultants noted that talking about intra-community competition does not make much sense. In reality there is very little duplication of effort in
Ghana and Nigeria and none of the interviewed companies feared increased competition from companies in the other ECOWAS countries.
42
Industry in the West African sub-region is still weak and the main part of industrial
growth is concentrated in a few sectors such as mining or oil production. In 1998 industry in Ghana accounted for 25% of value added as a percentage of GDP, but
manufacturing only accounted for 9%. Nigeria relies heavily on oil production making industry account for 41% of value added as a percentage of GDP, but again
manufacturing only accounts for 5%. Industry and manufacturing are envisaged to
provide sub-regional growth, but competition from European enterprises and lowcost Asian producers is putting local industry under pressure.
Especially Europe, which accounted for 46% of imports in 1997, presents a threat.
Asian producers often produce in direct competition with West African manufacturers and account for 14% of imports to the region. If West African industry is to enter
into long-term growth it will need some measure of infant industry protection and
improved local market access. Here the lesson from the tigers of East Asia can provide valuable experiences. ECOWAS and the Ghana-Nigeria fast track promises integrated markets and a common external tariff. Both measures which are vital for
growth of industry in the region.
Recently, there have been several developments in the implementation of the protocols for a free trade area in Ghana. As mentioned in section 3.3, Ghana has started
charging the 0.5% levy on imports from non-ECOWAS countries. The government
has also promised that all road blocks will be removed by September 1, 2000. Customs officials are being educated on good customs practises and CEPS conducts spot
checks in order to remove the road blocks. Companies are also being urged to apply
8
for the reduced TLS tariff for industrial goods .
4.6 The fast track negotiations for free trade
The strategy for harmonisation of rules and regulations in order to create a free
trade area is to establish a number of negotiating committees and let them develop
ideas for harmonisation and recommendations for accelerating economic integration.
The committee on ECOWAS Trading systems met at Abuja on January 17-18, 2000
as a follow-up on the inaugural Accra meeting on December 20-21, 1999. The objective of the meeting was to work out modalities for establishment of a free trade area
between the two countries by April 30, 2000. The work of the committee on the
ECOWAS trading system was divided into three sub-committees, namely
• Free trade (customs) area
• Standards organisation
• Food and drugs agencies
Sub-committee on free trade area
At the first meeting of the sub-committee on free trade there were two main conclusions. Firstly, countries involved in the fast track should start implementing the
TLS. Secondly, Benin and Togo should be invited to join the negotiations, as any
transit operation by road would involve the two countries. Benin and Togo actually
participated in the Mini Summit of Heads of State and Government on the creation
of an ECOWAS borderless zone in March 2000.
8
See annex 7.6 for the “Plan of action for establishing a free trade area”.
43
The recommended strategy for implementing the TLS was for the two governments
to incorporate the TLS in their budget statements for year 2000. Directives should be
given to the Ministries of Finance to implement the scheme from March 2000. Recommendations were also made concerning the application of the protocol on a community levy. Both these steps were to be taken immediately. Importantly recommendations were also made pertaining to a common external tariff. A technical subcommittee consisting of the Ministries of Finance, trade and customs should study
this issue and come up with proposals for accelerating its implementation.
Another important aspect of establishing a free trade area is co-operation in customs
matters. It was recommended that both countries should create customs websites by
February 2000 and implement the Automated System for Customs Data
9
(ASYCUDA) fully by the end of March 2000. It was also agreed that to ensure effective implementation and follow-up there was a need to establish a national monitoring body.
Sub-committee on standards
Product standards have been a frequently used non-tariff barrier. A harmonisation
of standards is an important step in the creation of a borderless zone. This would essentially mean that if a product is approved in either Ghana or Nigeria, it could be
exported to the other country without further ado. Such a step would be important
for streamlining the current procedure with certification in both countries.
The terms of reference for the sub-committee on standards was to study the standards of the Ghana Standards Board (GSB) and General Standards Organisations of
Nigeria (SON) and harmonise them. Furthermore, the regulations that govern export and import procedures should be studied. Discussions were held on issues such
as manpower development, laboratory facilities, a mutual recognition agreement and
packaging requirements. In the future, conformity assessment arrangements and
test reports will be standardised and importantly pre-shipment inspection in Ghana
will mean automatic approval in Nigeria and vice-versa. It was recommended that
the testing laboratories and product/quality system certification bodies should make
every effort to operate in accordance with the relevant ISO/IEC guides (25,62,65).
Since the inaugural meeting a lot of progress has been achieved. SON has visited
Ghana twice and a Ghanaian delegation has recently returned from Nigeria after
having discussions on issues such as quality, packaging and recycling. The timeframe for the talks is 2002 - well within the fast track schedule.
Sub-committee on food and drugs
Another non-tariff barrier for free trade is related to procedures for export and imports of food and drugs. In order to deal with the obstacle of different regulations the
sub-committee on food and drugs reviewed three areas of operation:
• Regulatory measures for trade of regulated products into Ghana and Nigeria
• A list of products whose import are currently restricted or banned
• Practical procedures for registration of regulated products
9
ASYCUDA is a system for custom reform and computerisation
44
Generally, the two countries have similar procedures within these three areas, but a
few differences were noted. For instance in Nigeria certificates of manufacture and
free sale must be endorsed by the Nigerian embassy in the country of origin. In
Ghana drug importation is only allowed through Kotoka Airport and Tema Seaport
and Ghana poultry and meat product importation is restricted by fat content. No major differences on export procedures currently exist. Other differences are that the
registration license of a regulated product is valid for five years in Nigeria and three
years in Ghana; the period of listing of products is 1 year in Nigeria and 3 years in
Ghana and a Certificate of Environmental Impact Assessment (CEIA) is required in
Ghana when licensing manufacturing premises.
Recommendations were made for policy reviews so that the procedures in the two
countries could be harmonised. It was emphasised that the private sector should be
informed of the common procedures adopted by the sub-committee. Three meetings
were scheduled in order to follow up on the preliminary work.
4.7 Private sector initiatives
All the key players in the Ghana-Nigeria fast track emphasise the pivotal role of the
private sector in regional integration, as it is the private sector that ultimately
stands to gain from economic integration. However, if serious consultation and sensitisation at the company level is not undertaken, critical areas may be forgotten - areas that only the operators with daily experiences of cross border trade can highlight. The overall assessment of the work undertaken so far is that it is promising.
The Chambers of Commerce were selected as the main representatives of the private
sector in Ghana and Nigeria for private sector consultations. As there are inherent
differences between the priorities of traders and manufacturers, this move has been
criticised by both AGI and MAN. The first meeting between the private sectors of
Ghana and Nigeria was held in February 2000. The main participants from Ghana
were GNCCI, AGI and PEF while delegates from different chambers of commerce
represented Nigeria. The participants were divided into 6 discussion groups namely
investment, trade liberalisation, infrastructure, protocol, monetary issues and implementation and monitoring. For a list of recommendations from the subcommittees see annex 7.2.
The proposals deal with many of the relevant areas for private sector integration. In
July, 2000 the chambers of commerce from all the ECOWAS members countries were
to meet and discuss revitalisation of FWACC. However the meeting was cancelled
due to lack of attendance and NACCIMA cancelled for no apparent reason. PEF has
also made critical remarks about the negotiations. They place serious doubt on
Ghana’s readiness to integrate.
4.8 Investments
An important rationale for establishing a free trade area within ECOWAS is increasing the size of the market. Most of the countries in West Africa are too small to attract large-scale foreign investments. However, the possibility of gaining access to
the about 250 million citizens through investment in one country makes the West
African market much more attractive. If a borderless zone is created between Ghana,
Nigeria and some of the smaller countries, Ghana’s chances of attracting investments will increase. Ghana is regarded as having a conducive investment climate
45
and could become an important gateway for foreign direct investments flowing into
West Africa. Integration of the markets will also increase investments from other
West African counties. According to GIPC, Nigeria is the only significant subregional investor in Ghana, with 30 investments in the period from September 1994 June 2000.
Scarcity of capital is one of the main problems facing the private sector in West Africa. The Nigerian Investment Promotion Commission (NIPC), Ghana Investment
Promotion Centre (GIPC) and other key private sector players met in February 2000
to discuss this issue in the context of the Ghana-Nigeria fast track. Two overall
themes were discussed: (i) Investment environment and funding and (ii) co-operation
and institutional building. A team was appointed to make recommendations for
harmonisation by the end of April 2000. For the main recommendations of the subcommittee see annex 7.2.
Discussions were also held on establishment of a Ghana Nigeria Public / Private sector dialogue forum. Such a forum is to be used for discussing issues pertinent to
business development in ECOWAS. Suggestions were also made for a West African
Arbitration Centre for handling of disputes related to investment or commercial matters. This centre should be established by ECOWAS at the latest in December 2000.
Revival of FEWAMA and FWACC were also discussed. The deadline for the next
step in the establishment of these associations was set to April 2000.
It was proposed that Ghana and Nigeria should form the nucleus of a West African
Investment Promotion Association (WAIPA). Basically, this association should serve
as a catalyst for joint investment promotion in line with the vision of attracting more
investments to a borderless West African market. At a prior ministerial meeting it
was decided that ECOWAS was to host and fund such an association. A step that,
according to Frank Ofei from the ECOWAS secretariat, is being implemented.
Stock Exchanges
With a market capitalisation of US$ 2,9 billion (1998), Nigeria has by far the largest
stock exchange in West Africa. Though the Ghana Stock Exchange (GSE) has performed quite well since it began operating in 1990, the market capitalisation of US$
1,4 billion in 1998 was less than half the size of Lagos. Therefore, Ghana has much
to gain from co-operating and ultimately merging with the Nigerian Stock Exchange
(NSE). With a combined value of more than US$ 4 billion a merged stock exchange
will become much more attractive for foreign and local portfolio investors. According
to the managing director of GSE Mr. Yeboa Amoa, this is an interesting prospect as
portfolio investments from Nigeria are virtually non-existent. He reckons that there
might have been a few Nigerian investments when the shares of Ashanti Goldfields
were floated, but otherwise investments from Nigeria have been minute.
A memorandum of understanding between the two stock exchanges was signed in
September 1998. The main areas of co-operation comprise communication and exchange of information, training of staff, surveillance and self-regulation. It is envisaged that the stock exchanges in the region will merge by 2004. A common stock exchange for Ghana and Nigeria will be the first step and then hopefully, it will be possible to first co-operate and then merge with the UEMOA stock exchange in Côte
46
d’Ivoire. At the end of the day this will probably be the best way to involve more foreign investors in the sub-regional market.
4.9 Donor support to regional integration
In this section, the policies of the two major multilateral donors supporting regional
integration, the World Bank and EU, are reviewed along with selected donor activities. It is likely that donors will play an important role in providing financial support
to the integration efforts. Their policies on regional integration can have a significant
impact on the ultimate goal of establishing a SMZ and a free trade area.
World Bank policy on regional integration in West Africa
The World Banks policy on regional integration in West Africa is essentially laid out
in a speech delivered at the Anniversary Forum on Acceleration of Regional Integration held in May 2000 in Abuja. The overall policy is very supportive of the initiative
taken by the governments of Ghana and Nigeria. However, according to the World
Bank country director for Ghana, Mr. Peter Harrold, the World Bank only recently
started developing a policy on integration in the sub-region. It is a new area that the
bank is investigating and the policy is still under preparation.
Despite the diversity that is found in the West African sub-region and a lack of a
comprehensive World Bank strategy several themes or pillars have emerged from
discussions with sub-regional players. These pillars and others yet to be developed
will form the focus of World Bank support. They are:
• Integrating markets
• Harmonising macroeconomic policies
• Key infrastructure investments
• Strengthening human resources and capacity
• Sub-regional peace and security
The World Bank is very supportive of further integration between Ghana and Nigeria. The strategy outlines a number of political and economic preconditions that
should be satisfied. A list of principles that could accelerate regional integration is
also given namely, open regionalism; subsidiarity; pragmatism and gradualism; and
private sector leadership.
The Bank does not see any conflict between the Ghana-Nigeria fast track and the
UEMOA block, but sees it as a variable geometry approach towards the ultimate
goal - integration of all the countries in the sub-region. An extra bonus for Ghana
will be the fiscal “lock in” that will be imposed on economic policy. The Bank hopes
that adherence to the convergence criteria will restrain the government from unsound economic policies.
EU policy on regional integration
The European Union policy framework for West Africa supports all integration efforts - also the Ghana-Nigeria fast track. However, the bulk of EU support has gone
to the UEMOA countries through technical assistance to individual countries, financial support for an integration framework and direct support to budgets of UEMOA
institutions. UEMOA has invested heavily in its secretariat. Consequently, it has become more efficient and much more dynamic than its ECOWAS counterpart.
47
EU does not see that there is any potential for conflict between ECOWAS and
UEMOA. However, because UEMOA has been dynamic and achieved significant
progress, EU has been interesting in giving support. The EU does not have an official position on the Ghana-Nigeria fast track, but sees a potential for a two pillar approach within the ECOWAS framework. Maybe the existence of two strong regional
blocks will strengthen the potential for a future merger.
Since the Ghana-Nigeria fast track is well within the overall policy of strengthening
regional integration, EU is also willing to support this initiative. Recently, EU has
financed a study of the potential and consequences of closer integration between
Ghana and UEMOA. Before the initiation of the Ghana-Nigeria fast track there was
a widespread feeling that Ghana was being left out of very important regional developments. However, the study concluded that it would be politically unwise to join
UEMOA and actually recommended that Ghana should align itself with Nigeria for
both historical and economic reasons.
The EU has expressed great willingness to support Ghanaian initiatives in relation
to the fast track. It is felt that the developments are so important that any sensible
initiative that can accelerate the process can receive support from the EU. Access to
the Nigerian market should increase the likelihood of economic growth in the region.
A vital factor in EU support to Ghana.
Other donors
Generally all the donor agencies support the regional integration effort in West Africa. Interviews with selected donor agencies reveal that the main activities are concentrated around support for infrastructure development. Most of the agencies are in
the process of developing strategies for support to regional integration in the future.
As an example ADB mentions regional integration in its vision statement. The bank
is involved in regional infrastructure development, especially within road development. USAID’s main regional activity is connected to the West African gas pipeline
through support to capacity building at the government level. This should enable the
involved ministries to handle negotiations with the private operators.
Table 16: Activities of selected donor agencies
Donor agency
ADB
USAID
UNIDO
Swiss Embassy
CIDA
Selected activities
• Infrastructure development (roads)
• Study of potential in agricultural trade between countries in West Africa
• Are not involved in any activities with specific relation to Ghana
• Funding of WAEN study of intra-regional transport conditions
• Are supporting capacity building connected to the West Africa Gas Pipeline
• Has never had a co-ordinated approach to ECOWAS
• Has sponsored the preparation of the ECOWAS industrial master plan
• Are planning a project called “An industrial policy framework for accelerating integration” in co-operation with the ECOWAS secretariat
• Has detected many problems concerning trade and are willing to support
proposals that deal directly with the problems
• Does not have any activities directly related to regional integration
48
The donor agencies are generally very interested in increasing their activities within
regional integration. Integration is seen as an important step in the development of
the countries in the region. Since most donor agencies also emphasise the role of the
private sector in economic growth, well-prepared initiatives from the private sector
organisations are likely to be eligible for support.
4.10 Conclusion
The Ghana-Nigeria fast track is an initiative with far reaching consequences for integration in West Africa. It has presented the anglophone countries with a powerful
alternative to UEMOA and bred new life into the ECOWAS institution. Ambitious
goals have been set for a SMZ and a free trade area. The initiative reaches beyond
Ghana and Nigeria and several countries have shown interest in joining the SMZ
and the free trade area.
Ghana has mainly opted to join Nigeria for political reasons. As it has been shown in
chapter 2, economic integration is presently much higher with other countries in the
sub-region. However, the fast track has heightened the UEMOA countries’ interest
in Ghana and Nigeria. If everything progresses according to the Bamako declaration
the two communities will join in 2004.
One of the main obstacles to regional integration has been a lack of real political
commitment to the ECOWAS agenda. This commitment appears to be present in the
Ghana-Nigeria fast track negotiations. The Presidents of Ghana and Nigeria have on
numerous occasions demonstrated their commitment through speeches and active
participation in the integration negotiations. Interviews with officials have also revealed the same kind of commitment. Meetings are held, information is exchanged
and new proposals are beginning to be implemented.
However, there are still a number of measures that need to be taken if the fast track
is to materialise into a functioning monetary union and trade co-operation. Ghana is
far away from reaching the criteria for the SMZ. Strong measures will have to be
taken if the targets are to be achieved. Nigeria is closer to reaching the targets, but
Nigeria’s main challenge will be to maintain the current relative political stability.
The negotiations for establishment of a free trade area have progressed a great deal.
Benin, Togo and other important trading partners within UEMOA have been included in the negotiations. There are a number of inconsistencies in the negotiation
with UEMOA, but they should not pose a problem if the necessary political commitment is present. If the fast track negotiations succeed they will bring considerable
benefits to the involved countries through increased trade and investment.
However, an increase in trade and investment can only become a reality if the private sector is involved in every stage of the process. The private sector organisations
have been involved and many important areas have been addressed. However, as the
following chapters will reveal, the question still remains: “Is Ghana ready to integrate?”
49
5 Private sectors views on regional integration
5.1 Background
The involvement of the private sector in the programme and strategies for regional
integration has been very limited from the time of the formation of ECOWAS. In recent times, however, the role of the private sector is being recognised by the governments. The initiation of the fast track approach has witnessed greater efforts by the
governments of Ghana and Nigeria to involve their respective private sectors in the
discussions and negotiations for integrating the two economies.
By and large, the Ghana and Nigeria private sectors are in favour of the GhanaNigeria fast track approach to the extent that this has the potential of accelerating
the ECOWAS integration process. In their view, the two countries have a lot in
common that could facilitate economic integration – common colonial heritage, and
resultant characteristic of the economies, culture and language. In addition, being
two of the four dominant economies in the sub-region, their integration would serve
to exert the needed pressures to get the other ECOWAS economies to move towards
the implementation of the ECOWAS agenda.
This notwithstanding, a substantial section of the Ghanaian private sector surveyed
had reservations about the practical consequences of this fast track approach on
their operations, taking into consideration the geographical location of Ghana vis-àvis its immediate neighbours who are all members of UEMOA. The current volume
and spread of trade between Ghana and these countries is quite significant compared
to that between Ghana and Nigeria which is dominated mainly by oil imports from
the latter.
One aspect of the Ghana-Nigeria fast tack approach is the effort to get the intervening countries, Togo and Benin, to subscribe to the free trade area that has been endorsed by Ghana and Nigeria. The view of Ghanaian companies interviewed is one of
scepticism about Togo and Benin’s commitment in view of their membership of
UEMOA. Yet by the fact of their geographical location, they could pose a threat to or
positively advance the fortunes of a Ghana-Nigeria free trade area.
The Ghana government’s approach to the fast track and the level of consultation
with the private sector did not commend itself much to the companies surveyed. In
their opinions, with adequate consultations and appreciation of the realities confronting operations on the ground, the government’s approach could have been more
guided by practical experiences. Government seems to have taken a position based
primarily on political considerations, which, in the view of the companies, could undermine the advantages that Ghana could benefit from a more comprehensive approach to UEMOA vis-à-vis Nigeria.
5.2 Direction of regional integration
Notwithstanding the fact of Ghana and Nigeria being anglophone countries and
showing a common economic legacy, the view of many of the Ghanaian companies is
that Ghana’s immediate neighbour, Côte d’Ivoire, should not be excluded entirely
from the integration process. Approaches to involving Togo and Benin in the GhanaNigeria fast track should be extended to Côte d’Ivoire. Being a key player in
50
UEMOA, the Ghanaian companies hold the view that if Côte d’Ivoire co-operates in
the process, it will drive other UEMOA members along.
As to whether Ghana should join UEMOA as an alternative to the Ghana-Nigeria
fast track, the companies surveyed were overwhelmingly opposed to it. They do appreciate the goal of the fast track approach, which is accelerating ECOWAS integration. However, they would prefer that the fast track would be inclusive of critical
players such as Togo, Benin and particularly Côte d’Ivoire.
The general view is that UEMOA should be absorbed into ECOWAS. There is a need
for harmonising activities and regulations so that the same conditions and privileges
will be applied to all countries within the sub-region regardless of whether they are
members of UEMOA or not. This is the only approach that will sustain Ghana’s
trade relations within the sub-region without at the same time sacrificing the ultimate goal of ECOWAS.
5.3 Potential benefits to industry
The objective of ECOWAS as set up in 1975 is to promote co-operation in all fields of
economic activity including agriculture, industry, transport, telecommunications,
trade, customs, immigration, monetary and financial matters, as well as social and
cultural affairs – in order to achieve rapid economic development and integration of
the economies of West African countries.
The vision of a larger regional market has been a major objective since the establishment of ECOWAS. Consequently, the strategy of market integration has been
adopted with supporting measures for facilitating increased intra-regional trade.
The companies covered by the survey in the three countries (Ghana, Nigeria, Côte
d’Ivoire) – all recognise the vital role that the integration of the West African economies could play in the socio-economic transformation. Given the global trends towards regionalisation, the industries were unanimous that the sub-region should not
be left out, if it is to become an active player in the global market and ensure sustained economic growth and development in member countries.
Specifically, potential benefits of integration perceived by the private sector include:
• the growth of new industries and the strengthening of existing ones
• economies of scale resulting from the large market created by integration
• real product and income creation
• employment generation
• integrated development of infrastructure
• promotion of healthy competition in terms of efficiency, quality and productivity
5.4 Private sector priorities, Côte d’Ivoire and Nigeria
Views from Côte d’Ivoire
There is no doubt that the private sector in Côte d’Ivoire recognises the importance
of regional integration as a means of economic transformation, not only for the
UEMOA countries, but also for the entire ECOWAS sub-region.
51
They recognise that their home market is relatively small and therefore would not
attract the required investment if not integrated with other countries. For this reason, the private sector has strongly supported their government’s efforts with integrating the francophone countries into UEMOA. Côte d’Ivoire’s private sector has
been very active in the establishment of UEMOA and is determined to ensure its
success. It can be said that the greatest priority of the private sector on regional integration is to first ensure the success of UEMOA.
There are several reasons for Côte d’Ivoire’s interest in UEMOA. Côte d’Ivoire is the
most industrialised country in UEMOA accounting for 75% of industrial production
together with Senegal. According to the Chambre de Commerce et d’Industrie de
Côte d’Ivoire, Ivorian products comprise 90% of the products listed for reduced tariffs
within UEMOA. The private sector therefore stands to gain should UEMOA succeed.
Furthermore, it has been much easier to integrate UEMOA because of the use of a
common language, common currency and the member countries’ strong affiliation
with France. The private sector considers the establishment of UEMOA as a first
step towards eventual proper integration of ECOWAS. Therefore the success of
UEMOA will, to a large extent, determine the success of ECOWAS.
Ghana is considered an important trading partner to Côte d’Ivoire and therefore, a
potential member of UEMOA. The private sector in Côte d’Ivoire would like Ghana
to join UEMOA for various reasons. Côte d’Ivoire has a lot in common with Ghana –
border, culture and history – and therefore it would be easier and cheaper to integrate with Ghana. Furthermore, there is already a large volume of informal trade
between Ghana and Côte d’Ivoire. It is estimated that the informal trade could
amount to 90% of formal trade. Integration will therefore formalise and enhance
trading activities.
Côte d’Ivoire is the most dominant country in UEMOA as a result of unbalanced industrial development among member states. There are therefore different degrees of
losses and gains arising from integration. Such inequitable distribution of gains has
the tendency to make some member states reluctant to co-operate fully in the integration process. Especially when very few countries are seen to be dominant.
Ghana’s membership should result in a more equitable distribution of gains.
Although the private sector in Côte d’Ivoire recognises Nigeria as constituting the
single largest market in the sub-region, it is not their immediate objective to integrate with Nigeria. There is the problem of language, currency and the general lack
of confidence in Nigerian businessmen. The fact that Nigeria could dominate the
market was not considered a potent issue, but the honesty of the Nigerian businessmen is a great concern.
The Ghana-Nigeria fast track is generally considered a good initiative for accelerating the integration of ECOWAS. If Ghana and Nigeria could establish another trading block, it would become easier to merge with UEMOA. But the question commonly
asked was “why should Ghana integrate with Nigeria instead of Côte d’Ivoire”? In
the opinion of the Ivorian private sector, integration with Côte d’Ivoire would have
been an easier option for Ghana.
52
Views from Nigeria
The Nigerian companies, no doubt, recognise the vital role of regional integration in
the socio-economic transformation of the countries of the sub-region and express the
need for commitment and concerted efforts from all countries in the sub-region towards the goals of ECOWAS.
All the companies surveyed admit that in spite of Nigeria’s vast market, the country
still stands to benefit more from integration. Diversification of the production base
resulting from regional integration of industrial processes, economies of scale and
integrated infrastructure development are some of the key advantages to be derived
from integration.
Even though some companies were of the view that the Nigerian market was large
enough to support optimal production levels of their operations, the opportunities offered through an expanded market and a more competitive environment within the
framework of regional integration would be welcome developments.
One of the few Nigerian companies that has developed an ECOWAS wide strategy is Nigerian
Foundries. Nigerian Foundries operates with the same service concept in the entire ECOWAS
region. The company is very interested in increasing its activities in Ghana, where many of the
potential customers are situated. However, the company still experiences numerous trade barriers and despite a very active efforts outside Nigeria, the company is only able to export approximately 2% of its production to the regional market.
Nigerian companies basically face the same problems as Ghanaian companies when
exporting to the ECOWAS region. Therefore, it is felt that a link between Ghana and
Nigeria will be important for advocating for reduced tariffs, removal of red tape and
establishment of a system for cross border payments. Just like the Cedi, the Naira
cannot be used for cross-border transactions. This means that the Nigerian companies are very supportive of any efforts to establish a second monetary zone.
The Nigerian private sector consequently is supportive of the Ghana-Nigeria fast
track approach as a means to accelerating the ECOWAS agenda. In their view, this
approach constitutes a potent and positive response to UEMOA and would exert the
required pressure for immediate convergence between the two blocks.
FEWAMA
Companies and business associations surveyed in the three countries (Ghana, Nigeria and Côte d’Ivoire) are unanimous that the private sector should spearhead the
integration process. Revitalising the Federation of West African Manufacturers Association (FEWAMA) is therefore considered a step in the right direction. This will
however, require a thorough co-ordination and an arrangement of common strategies
and actions among private sector associations.
FEWAMA was established by the manufacturers’ associations of West Africa in order to:
• promote the establishment of national manufacturers’ associations in member
countries of ECOWAS where they do not exist
• promote and sustain a permanent link between associations of manufacturers
and related sectoral organisations in the sub-region
53
•
•
•
•
provide a forum for disseminating information and formulating general policy
with regards to industrial, labour, social, legal, training, and technical matters
for industrialists within the sub-region
promote intra-regional trade in locally manufactured goods within the context of
the ETLS
identify and harness local sources of raw materials for processing and for industrial utilisation
promote industrialisation in member states by means of exhibitions, seminars
etc. and the encouragement of bilateral co-operation among member states
The following countries were members of FEWAMA: Benin, Burkina Faso, Côte
d’Ivoire, Ghana, Guinea, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra
Leone and Togo. The FEWAMA secretariat was situated in Lagos, Nigeria and a
permanent secretary was responsible for the daily operations of the association.
MAN made the main part of the contributions to the secretariat. In 1995 FEWAMA
could not conduct its annual general meeting because of lack of attendance. Consequently, it was decided that the activities of the association should be discontinued.
FEWAMA failed for a number of reasons. Members were reluctant to contribute to
the secretariat and attendance at FEWAMA meetings was low. Furthermore, many
of the manufacturers’ associations in West Africa were not financially capable of paying contributions to an association such as FEWAMA.
However, the largest manufacturers associations in West Africa, AGI, FNISCI and
MAN are now determined to revive FEWAMA. They have all expressed commitment
to the FEWAMA agenda and agree that the recent developments towards accelerated
regional integration are sufficiently important to justify increased co-operation between the associations in the sub-region. The view is that if the three strongest associations in the sub-region can form the nucleus of the federation, it will be possible to
revive it.
The private sector needs a strong voice in the negotiations for further integration.
AGI and MAN need to place their priorities on the fast track agenda and FNISCI
would like to establish closer ties with its sister organisations in order to convince
the Ivorian government of strengthening the relations with non-UEMOA countries,
especially Ghana. Companies in the three countries face many of the same problems.
Furthermore, the difficulties with the ECOWAS regulations and cross border trade
apply to all countries in the sub-region. Therefore, there are many common goals
that can be pursued through FEWAMA.
5.5 Ghana’s competitive advantages
This section of the study reviews the nature and performance of Ghana’s products in
the ECOWAS sub-regional market. The conclusions are primarily based on available
statistics and company interviews.
Table 17 gives details of Ghana’s major exports to ECOWAS (in % of total exports to
ECOWAS) for the past five years.
54
Table 17: Ghana’s major exports to ECOWAS
Product
1. Wood and wood products
2. Iron and steel
3. Minerals, fuel oil and products
4. Aluminium and Alu. Products
5. Mechanical appliances and parts
6. Plastic and plastic articles
7. Oils & resin oils, perfumes, cosmetics
8. Chemical products
9. Salt, Sulphur, Stone etc.
10. Textiles
11. Vehicle parts and accessories
12. Furniture and bedding Mt.
13. Provisions
14. Electrical equipment & Parts
15. Cereals
16. Fruits & Nuts
17. Tobacco
18. Malt/Starches etc.
19. Paper, Pulp etc.
20. Animal/ Vegetable fats & oils
21. Iron and steel articles
22. Cotton
23. Fish & Aquatic Invertebrates
Source: Ghana Statistical Service
1995
0.12
0.2
10.8
87.3
0.003
0.01
0.01
0.2
0.02
0.001
0.03
0.04
0.04
0.1
0.03
0.3
0.2
0.03
0.005
0.004
0.2
0.001
0.01
1996
5.1
9.6
31.2
5.1
3.12
1.13
0.7
0.3
6.0
0.0001
2.19
1.7
0.007
1.2
5.9
1.9
1.4
1.4
1.0
1.8
0.5
1.66
2.51
1997
1.6
3.7
26.9
16.3
5.1
2.3
0.4
0.06
3.6
1.4
1.9
1.5
0.02
5.1
0.3
0.10
0.8
0.8
9.0
1.1
0.5
13.4
0.9
1998
3.0
1.4
34.5
9.8
2.0
2.6
0.8
0.8
12.6
0.07
1.6
6.7
0.1
0.4
5.4
0.1
0.6
3.7
0.4
0.4
4.6
0.7
1.6
1999
24.9
19.7
16.0
14.1
2.8
2.1
2.0
2.5
1.7
1.5
1.5
1.4
0.9
0.9
0.2
0.3
0.1
0.1
0.4
0.2
0.4
0.8
0.8
The 23 products mentioned in table 17 feature prominently in the ECOWAS market.
Each of the products has, between 1995 and 1999, contributed to at least 1% of total
export revenue from ECOWAS for at least one year. Products such as aluminium,
wood and wood products, iron & steel, salt and textile have over the years maintained their relatively high level percentages of more than 1% of each year’s export
revenue from the sub-region.
It may be relevant to state that Ghana’s non-traditional exports to ECOWAS have
10
diversified since 1998 . However, the total export revenue from ECOWAS accounts
for only 12.6% of Ghana’s total export earnings, which is still small. About 90% of the
companies interviewed export to the sub-regional market. Exports of their products
range from 15% to as much as 75% (in the case of salt) of their annual sales volume.
It is the view of the companies that Ghana has a competitive advantage in the production of the following goods: salt, aluminium products, packaging materials, soaps
& detergents, furniture, textile, electrical cables, canned tuna, hair products, cocoa
processing products, iron & steel products, processed fruit, and plastics. 90% of the
products mentioned by the companies are among the 23 major products of Ghana’s
export to the sub-region, which confirms the importance of these products to Ghana
as far as the sub-regional market is concerned.
10
CTA for ministry of trade report 1998.
55
In assessing Ghana’s competitive advantage in the sub-region one should bear in
mind that West African economies are basically the same, i.e. they produce similar
products because of similar climatic conditions and similar levels of technology.
Ghana’s competitive advantage in the production of the above products stems from
the relatively large number of manufacturing plants in Ghana as compared to most
other countries such as Niger, Togo, Benin & Burkina Faso, and Mali. Furthermore,
Ghana has natural resource endowments for the production of products such as salt
and wood products.
Salt is an example of how increased access to the sub-regional market can provide benefits to
more countries than the one with the competitive advantage. Ghana and Senegal are the only salt
producing countries in West Africa. Ghana’s annual production is 350 Mt. (71%) and Senegal’s is
100Mt. (29%). Ghana’s salt is generally considered to be of a superior quality to that of Senegal. It
is estimated that the current total salt production by the two countries constitute less than 50% of
Nigeria’s annual salt requirement. The implication is that, the market potential is sufficiently
large to sustain production in both salt-producing countries.
5.6 Conclusion
The Ghanaian private sector is very positive towards the overall aims of regional integration. Companies feel that the access to regional markets can result in substantial benefits. Nigeria is generally seen as the most important market, and the companies are generally not in favour of Ghana applying for membership of UEMOA.
However, given Ghana’s geographical position, the fast track should be extended to
include more countries. Gaining access to the Nigerian market is generally regarded
as being very difficult. Furthermore, free trade with Nigeria will not be possible unless Benin and Togo are committed to participating in the negotiations. Therefore,
every possible effort should be made to ensure that these two countries are committed to the negotiations for a borderless zone.
Another important country that should be included in the fast track is Côte d’Ivoire.
Ghana and Côte d’Ivoire are both relatively industrialised and are of approximately
the same size. Language is not regarded as a problem on either side of the border.
For these reasons the interviewed companies generally feel that Côte d’Ivoire should
be included in the fast track negotiations.
It is generally believed that Ghanaian industry is sufficiently developed to cope with
increased competition with the neighbouring countries. None of the companies interviewed were scared about the prospects for increased competition through establishment of a free trade area. They were looking forward to the prospect of increased
access to the sub-regional market.
56
6 Proposals for support
6.1 Introduction
Regional integration is regarded as instrumental to the development of Ghana’s
economy. Increased trade with the neighbouring countries is envisaged to result in
accelerated development and growth. Consequently, Ghana has been an active participant in ECOWAS and recently the fast track initiative with Nigeria.
However, the feeling among economic operators is that integration remains a political project. Companies complain that the necessary framework for free trade has not
yet been put in place. Furthermore, the private sector has not been properly consulted on its priorities for integration. Ghana’s aspiration to become the gateway to
West Africa does not make much sense when the existing trade barriers prevent
large-scale exports to the sub-region.
As a part of this study 13 companies in Ghana, and several companies in Nigeria and
Côte d’Ivoire have been interviewed concerning their experiences with cross border
trade. The companies have identified a number of barriers that need to be removed if
free trade in West Africa is to become a reality.
It was interesting to note that most companies did not raise the issue of language as
a major barrier to trade. Apparently many Ghanaian companies have employed personnel with a French background to handle trade issues with francophone countries.
It was also interesting to note that a good number of business people in Côte d’Ivoire
were able to communicate in English. The view of the private sector is that although
language could pose a problem for intra-regional trade, this can be overcome without
much difficulty, if other barriers are removed.
Another major barrier to proper integration is poor infrastructure linking countries
in the sub-region. In order to promote free and fast movement of people, goods, and
services, regional infrastructure should be developed to a more sophisticated level.
Whereas roads between Ghana and its immediate neighbours are sufficiently developed to transport goods and persons, the numerous security checks and cumbersome
procedures adopted by security agencies makes road transport very expensive and
highly inconvenient. Generally, road networks linking ECOWAS countries are nothing to write home about.
Sea transport also entails a number of problems including lack of direct shipping
links within the sub-region, poor port facilities and a general lack of commitment of
port officials in ensuring fast clearance of goods at the ports. Although roads in the
sub-region have improved in the recent past there are still a number of problems related to transport. Firstly, a railway line linking countries in the sub-region is essential for proper integration. Secondly, air transport among sub-regional countries is
not well developed, it is poorly patronised and very expensive. Thirdly, the telecommunication network in the sub-region is also not well developed and it is easier to
communicate with Europe and USA than with West African countries.
To summarise, infrastructure is a major barrier to regional integration. However,
the development of adequate infrastructure is a long-term project, requiring very
57
heavy investments. In the short term, the biggest problem is related to road blocks
and other forms of administrative harassment.
In addition to the long-term problem of underdeveloped infrastructure, the companies identify 5 main short-term barriers to regional integration. If intra-regional
trade is to increase, it will be necessary to remove these barriers. In the following
section these barriers are discussed along with 11 proposals for their removal. The
proposals contain a recommended action for AGI and a suggestion for donor support.
5 barriers to trade
1.
1. Red tape concerning
concerning
export
/ importproceproceexport/import
dures dures
11 proposals for removing them
1.1 Harmonisation of certification and testing procedures
1.2. Simplification of export / import procedure
1.3 Fast track application procedure for TLS tariff
2. Lack of intraregional payment and
clearing system
3. Road blocks and obstructive attitude of
officials
4. Mistrust between
the economic operators
in the sub-region
2.1. Introduction of WAIPS (West African Interbank Payment System)
3.1. Establishment of an institution for surveillance of irregular trade practices and a sealing system
3.2. Privatisation of CEPS, payment reform
4.1. Revival of Federation of West African Manufacturers Association (FEWAMA)
4.2. Networking between regional trade arbitration centres
5.1. Export financing
5. Lack of enabling
environment for Ghanaian exports
5.2 Establishment of dedicated warehouses for
Ghanaian goods
5.3 Export promotion in ECOWAS countries
58
6.2 1. Red tape concerning export/import procedures
1.1 Harmonisation of certification and testing procedures
Background
Certification of products is a frequently used trade barrier in the West African subregion. Agencies such as the national food and drugs administration, standards
board and customs often use procedures that effectively exclude imports of certain
products. Support to harmonisation of certification procedures is important for accelerating regional trade integration. The ultimate goal should be that a product, certified in Ghana, receives automatic approval in Nigeria and vice versa. The relevant
bodies have already started work on harmonisation under the fast track initiative.
With reference to a lack of correct documentation, companies can be prevented from
exporting to the other countries. For instance, Panbros Salt has experienced numerous problems with the NAFDAG Board - the Nigerian version of Ghana Food and
Drugs Board. NAFDAG is extremely strict in issuing license for food exports. In
Panbros’ opinion clearly a ploy for support of local industries.
Action
The relevant bodies, i.e. Ghana Standards Board (GSB), Environmental Protection
Agency (EPA) and the Food and Drugs Board (FDB) in Ghana and their counterparts
in Nigeria have already met and identified the main obstacles for harmonisation.
The organisations still need to meet and elaborate more on the proposals before they
are submitted to the government for implementation.
Method of support
• Support for meetings of officials
• Support for preparation and implementation of harmonisation proposal
1. Red tape concerning
export/import procedures
1.1 Harmonisation of certification and testing procedures
1.2 Simplification of export / import procedures
1.1.1 Support for
meetings of officials
1.1.2 Support for
harmonisation proposal
Background
One of the main complaints of traders concerns the complicated procedures associated with transport and clearing of goods. The problems exist regardless of whether
the goods are transported by sea or by road. Some manufacturers stated that the
documentation and the appropriate tariffs are not made clear and left to the discretion of the custom officials who take the opportunity to cheat traders.
At the ports in Tema and Lagos, most companies describe clearing of goods as extremely bureaucratic. A company reported that it had to deal with thirteen different
59
institutions when clearing goods at Lagos port. The normal clearing time for goods is
one month, but it can easily take up to two months.
Similarly, it can easily take two weeks to get a truckload of goods by road from Abidjan to Accra. An example is import of PVC from Côte d’Ivoire. When a truck arrives
at the border the importing company has to call the EPA in Accra and ask them to
take a product sample back to Accra for testing. This normally takes three days.
Then the sample is sent to GSB for certification. This takes at least one day. Finally,
the sample is sent to the Customs Excise Preventive Service (CEPS) for final approval. This normally takes 3 days. Altogether, getting the PVC across the border
takes at least one week and often more. In addition to this there are numerous road
blocks on the road to Accra.
If trade in the sub-region is to increase, it will be necessary to streamline the complicated export and import procedures.
Action
AGI will initiate discussions with the port authorities and government institutions
on how clearing time can be reduced. Furthermore, a comparative study between the
ports in Abidjan, Lagos and Tema should be commissioned. The study should identify the main obstacles to efficient clearance, benchmark the three ports against an
efficient port in Africa and generate a list of proposals for reform.
AGI has collected sufficient material to highlight the problems and engage government in a discussion on a streamlining of export/import procedures. Discussions with
the relevant organisations such as GSB, FDB and CEPS will also be initiated. AGI
will generate a list of concrete proposal for streamlining of the procedures.
Method of support
• Support for a study of clearing in the ports of Abidjan, Lagos, Tema and another
port that is known to function smoothly (eg. Mozambique). The report should
come up with suggestion for how clearing time can be reduced.
• No external support is needed before the proposals for streamlining the import/export procedures are ready for implementation.
1. Red tape concerning
export/import procedures
1.2 Simplification of export/import procedures
1.2.1 Study of clearing
procedures at regional
ports
1.3 Fast track application procedures for ETLS tariff
Background
High and discriminatory tariffs imposed on goods by ECOWAS members are a major
barrier to trade. Companies in both Ghana and Nigeria complained that whereas
goods from an UEMOA member country to other member countries are of often duty
free, goods from anglophone countries are subject to high tariffs. The interviewed
companies state that UEMOA tariffs have had serious negative effects on their exports to the sub-region.
60
The company Poly Products gives the following example. Poly Products’ products are
regarded as being highly competitive in the sub-regional market. However, the company loses many orders in spite of a large number of inquiries from interested buyers
within UEMOA. Despite the fact that their products have been approved under the
ETLS, resulting in a 15% import duty, the UEMOA countries still charge 25%. This
means that it is very difficult to export anything to UEMOA. Panbros Salt has experienced the same type of problems. The UEMOA countries impose a 21% import
duty on Ghana’s salt whilst it is zero on salt from Senegal. This means that Ghanaian salt is effectively excluded from UEMOA.
Another example of the difficulties that companies face because of the different trading regimes in the sub-region, is given by the Managing Director of Tema Steel. He
owns a brick factory in Togo with an annual production of 1,2 million tons. The
products from the factory are registered under the ELTS scheme, but this has turned
out to be a problem. Because the products are ETLS registered they cannot be included in the UEMOA scheme for reduced tariffs which, in the case of exports to the
other UEMOA countries, is much lower than the ECOWAS tariff.
Another problem is related to application for the ETLS tariff for industrial products.
The procedure is reported to be so cumbersome that many companies see no point in
applying for the scheme. For a description of the application procedure see section
3.5.
Action
It can be concluded that there is pressing need to harmonise and reduce tariffs in the
sub-region. Companies are prevented from entering the sub-regional markets by
high and discriminatory tariff.
Introduction of a new approval procedure for the ETLS tariff, involving for instance
only the fast track countries, could shorten the processing time for applications. The
new procedure should result in an approval time of less than two months. The
ECOWAS secretariat should continue with processing the applications for the tariff,
but the final approval should be delegated to only one committee.
AGI will initiate discussions with government on both a harmonisation of tariffs and
implementation of a new and less cumbersome application procedure. Whereas harmonisation of tariffs with the UEMOA countries may take some time, a streamlining
of the application procedure is very relevant to the fast track. Both areas will also be
important for a revived FEWAMA, as manufacturers in all countries in the subregion experience problems related to discrimination and the ETLS.
Method of support
• No external support needed
1. Red tape concerning
export/import procedures
1.3 Fast track application
procedures for ETLS tariff
1.3.1 No external
support needed
61
6.3 2. Lack of an intra-regional payment and clearing system
2.1 Introduction of WAIPS (West African Interbank Payment System)
Background
A major obstacle being encountered by companies trading in the sub-region is payment difficulties. Payment for goods in the different currencies of the region with different rates of convertibility and payment restrictions has discouraged several companies from exploring market opportunities in the sub-region.
Companies saw the establishment of ECOBANK as a step in the direction of resolving payment difficulties among traders. However, the bank’s operations have not
made the expected impact and traders still take the risk and inconvenience of carrying large sums of money to other countries to purchase goods. Regional banks are
expected to develop strategies and products to finance intra-regional trade.
There is a need to harmonise regional monetary systems to achieve currency convertibility in order to facilitate trade. Exchange rates could be fixed and allowed to
fluctuate only within defined margins. An individual country’s currency should have
fixed parity to one major foreign currency, for example the US dollar. In the long
term, companies are advocating for the introduction of a common currency like the
Euro. Introduction of a single currency was considered the ultimate and permanent
solution to the payment problem.
The general view among the companies surveyed is a first step towards a solution to
the payment problem is introduction of a system for cross border payments and efficient clearing procedures. Although the establishment of Forex bureaux in some
countries has improved the situation a little, the problem remains unresolved, as
most the sub-regional currencies are not traded at the bureaux. It is impossible to
use local currencies (except CFA franc) as payment for products purchased in other
countries in the sub-region. Previously, the West African Monetary Agency (WAMA)
has facilitated a clearing mechanism, but Ghana does not currently use the system
due to unfavorable exchange rates for the Cedi and a permanent trade deficit with
the sub-region.
ECOBANK and 50 other banks in the sub-region have developed a system for interbank payment (WAIPS). WAIPS works in the following way. An importer situated in
Ghana would pay for the goods in Cedi to a bank situated in Ghana. The Ghanaian
bank would then transfer the order to another bank in the recipient country, say
Côte d’Ivoire. The Ivorian bank would then transfer the payment to the exporting
company in CFA Francs. At the end of the month the net position between all the
banks in the system would be settled in hard currency by the central bank.
The system was to have been introduced in August 2000. However, due to the permanent lack of foreign exchange in the sub-region, the introduction was postponed
indefinitely. Especially the Bank of Ghana does not have sufficient foreign exchange
reserves to support the scheme.
62
Action
AGI will initiate discussions with regional banks and financial institutions with the
aim of establishing a cross border payment mechanism. If WAIPS proves to be a solution to the problems the Bank of Ghana should be encouraged to sponsor it. A forum for discussion will be established where banks and the government are informed
about the needs of the private sector, encouraged to set up a system and sensitized
on the possibilities for generating a profit from the transactions.
Donors provide large amounts of foreign exchange to Ghana through support to the
capital account. In the future some of the foreign exchange could be allocated to the
banks that operate WAIPS. This would enable them to clear the net deficits every
month. A pooling of resources between the donors could be considered.
Method of support
• The World Bank and other multilateral institutions should be encouraged to
support the Bank of Ghana’s participation in WAIPS
• Direct foreign exchange support can be given to the banks that operate the system through the annual donor transfers.
2.1.1
Multilateral
support for scheme
2. Lack of intra-regional
payment and clearing
system
2.1. Introduction of WAIPS
2.1.2 Direct foreign
exchange support to
operators of WAIPS
6.4 3. Road blocks and obstructive attitude of officials
3.1 Establishment of an institution for surveillance of trade irregularities and a sealing system
Background
Traders constantly complain about harassment by officials from the military, police
or customs that establish road blocks and demand illegal levies. Furthermore, since
transports waiting for clearance are often unprotected, theft is frequent. Difficulties
with establishing secure and reliable transports are damaging to regional trade.
In 1997 the West African Enterprise Network (WAEN) initiated a survey of trade irregularities based on previous studies and observations by members. The survey revealed that transport costs as a percentage of the total value of imports for the
UEMOA countries add up to 18%. The costs for Ghana would be of the same magnitude. For comparison this figure is around 6% for the rest of the world.
There are also substantial problems with road blocks. From Ouagadougou, Burkina
Faso to Accra, Ghana there is an average of 20 roadblocks for every transport. This
means that there is a roadblock for every 40 kilometres of road. The control of the
transports takes at least 20 minutes at each roadblock. This can amount to delays of
as much as 30 hours, depending on the mood of the controllers. Apart from delays
the road blocks add substantially to the cost of transport. In 1997, the average costs
63
of illegal levies charged at the road blocks amounted to Cedi 100,000 and the legal
levies amounted to Cedi 64,000.
The WAEN study includes a number of recommendations for how it would be possible to remove the irregularities.
Action
Establishment of an institution for surveillance of irregular trade practices both on a
regional and national level has been suggested by WAEN. A co-operation between
these observatories is envisaged.
Based on information on anomalies, a new Intra-State transport system has been
discussed suggesting, among other issues, the implementation of a special sealing
system to protect goods. The system already exists, but is only used to a limited extent. If illegal controls of sealed vehicles and unauthorised unsealing will be liable to
punishment then mandatory use of the system could reduce the number of roadblocks.
The government of Ghana has promised that all roadblocks will be removed by September 1, 2000. It will be necessary to wait until then before deciding on the establishment of the system.
Method of support
• Support for establishment of institution for surveillance of trade irregularities
• Support for implementation of a sealing system for goods
3. Road blocks and obstructive attitude of officials
3.1 Establishment of an institution for surveillance of
trade irregularities and a
sealing system
3.1.1 Support for establishment of surveillance institution
3.1.2 Support for implementation of sealing system.
3.2 Education programme for customs officials, privatisation of CEPS
Background
Harassment by customs officials is one of the biggest problems related to trade in the
ECOWAS area. Education and sensitisation of customs officials on ECOWAS rules
and trade facilitation will be an important step in eliminating this problem.
There are several initiatives under way to educate customs officials. CEPS in Ghana
is already conducting an education programme for customs officials and there are
similar initiatives taking place in Nigeria. This has already had some effect and economic operators have started reporting a reduction in the number of roadblocks in
Ghana. Furthermore, a number of initiatives are under way in connection with the
World Bank sponsored Ghana Investment and Trade Gateway Programme
(GHATIG).
However, the feeling is that the institutional set-up of CEPS still needs to be
changed. Perhaps CEPS should be privatised. Furthermore, the performance of offi64
cials should not only be evaluated by the amount of duty that they collect, but also on
the volume of trade that they facilitate. Another reason for the road blocks is the
salaries of staff employed by CEPS. The salaries of civil servants are generally very
low and the road blocks are seen as a possibility for making a “little extra on the
side”.
Action
AGI will advocate for a change in procedure within CEPS and will initiate discussions with government on privatisation. Targets for removal of road blocks should be
set. CEPS and the other institutions that establish roadblocks should constantly be
evaluated on the progress with achieving the targets.
Method of support
• Support for privatisation of CEPS
• Support for salary reform for customs officials
3. Road blocks and obstructive attitude of officials
3.2 Privatisation of CEPS,
Payment reform
3.2.1 Support for
study of privatisation
3.2.2 Support for
payment reform
6.5 4. Mistrust between operators in the sub-region
4.1 Revival of FEWAMA
Background
There appears to be a lot of mistrust between the countries in the sub-region. Especially the Nigerians have been stereotyped as unreliable. This negative perception
was strongly expressed by both Ghanaian and Ivorian companies. Although they do
acknowledge that there are a good number of genuine business people in Nigeria
they will be very cautious in dealing with them. Whilst some companies have vowed
not to transact any business with a Nigerian, others will not be prepared to sell on
credit. On the other hand, some companies consider Ghana too “vulnerable” to survive Nigerian crooks.
The situation has serious negative implication on integration. Business thrives on
trust, and therefore it is important that this negative perception is erased. It is important to add, however, that companies will be more comfortable dealing with
members of MAN, who will be easier to trace in case of default. Many of the interviewed companies also emphasise the importance of revitalising FEWAMA in order
to strengthen relations between economic operators in the sub-region.
The general feeling among economic operators is that the private sector has been
given very little voice in the negotiations for integration. Many of the leading private
sector associations have not even been invited to participate in the negotiations. At
the company level, managers complain that they hardly receive any information
about the fast track initiatives and many of them are unaware of the implications for
their companies. This has meant that the negotiations have proceeded without input
from the operators that ultimately stand to benefit from further regional integration.
65
Action
FEWAMA should be revived so that industry has the power to advocate for transnational issues towards governments in the sub-region. It is envisaged that the four
main industrialized countries in ECOWAS, Côte d’Ivoire, Ghana, Nigeria and Senegal should form the nucleus of the organization. It is envisaged that closer cooperation between the associations will be an important step in building trust.
Furthermore, government must be made aware of the private sector’s priorities. This
can be done through seminars where the priorities are presented to key government
officials. Similarly, the private sector must be made aware of the implications of the
fast track negotiations so that they can adjust their business strategies accordingly.
Method of support
• Support for meetings between the manufacturers associations of Côte d’Ivoire,
Ghana, Nigeria and Senegal (and others)
• Support for the arrangement of seminars with key government officials
• Support for private sector sensitization seminars
4.1.1 Support for
meetings and secretariat
4. Mistrust between operators in the sub-region
4.1 Revival of FEWAMA
4.1.2 Support for
seminars with government
4.1.3 Support for
PS
sensitisation
seminars
4.2 Networking between regional trade arbitration centres
Background
Several companies have raised the issue of lack of trust as a barrier to trade in the
sub-region. Previous bad experiences with missing payments for goods delivered
have discouraged companies from cross border trading. Establishment of a neutral
body that can settle disputes between companies would be an important step in
strengthening the relations between traders.
Ghana has recently established a Danida supported trade arbitration centre that
deals with trade disputes within Ghana. This is a great advantage for the companies,
as it is now possible to settle trade disputes outside the normally slow judicial system. In principle the centre is open to trade arbitration between companies from all
countries. However, companies are not yet aware of the scheme and contacts have
not been established to the trade arbitration centres in Nigeria and Côte d’Ivoire.
Action
A regional trade arbitration centre will be an important step in eliminating the lack
of trust. The centre should have the authority to handle trade disputes and penalise
companies that are unwilling to fulfil their obligations. Basically, there are two approaches that can be pursued. Trade arbitration can be co-ordinated between already
existing centres in the sub-region or a new centre can be established. The first step
66
would be to strengthen the networking activities between the existing arbitration
centres.
Method of support
• Support for networking activities between the already existing trade arbitration
centres in the sub-region.
• Support for sensitisation of companies on the importance of using the centre for
settling commercial disputes
4. Strengthening relations between operators
in the sub-region
4.2 Networking between regional arbitration centres
4.2.1 Support for
networking activities
4.2.2 Support
sensitisation
companies
for
of
6.6 5. Lack of an enabling environment for Ghanaian exports
5.1 Export financing
Background
An export financing institutions, which lends at “reasonable” interest rates, could be
an important step in increasing Ghanaian exports. Such an institution can evaluate
buyers, provide working capital and take some of the risks associated with cross border trade. It is currently close to impossible for Ghanaian companies to gain access to
export financing. The institution should be run as a profit organisation, but donors
could take some of the risk associated with lending.
ECOBANK is facilitating a USAID sponsored export-financing scheme for the Ministry of Trade and Industry. The system has been operational for three years and provides short-term (max 360 days) capital with an interest rate of 15%. The scheme is
mainly targeted at small and medium scale enterprises that wish to export to the
sub-region. The maximum amount that can be provided is US$ 150.000 with a limit
of 70% of the order. Companies must be able to show a confirmed order and a letter
of credit in order to access the scheme.
The Export Financing Company Ltd. (EFC) provides the same services, but does not
receive donor support. EFC has 10 years of experience with export financing. Due to
now abandoned bad lending practices, the company is struggling with old debt. Negotiations with the Bank of Ghana have started on rescheduling or cancellation of
the debt. The company has established a database of exporters in Ghana and claims
to possess the knowledge necessary for assisting exporters with developing new
markets.
Action
Contacts have been made to both ECOBANK and EFC. AGI will initiate discussions
with companies and institutions that are interested in investing in EFC.
67
Method of support
• Further study of the conditions for investment in ECOBANK or EFC
• Equity support to ECOBANK or EFC
5.1.1 Study of con• Capacity building at ECOBANK or EFC
ditions for investment
5. Lack of an enabling
environment for Ghanaian exports
5.1 Support for an export financing institution
5.1.2 Equity support
5.1.3 Support for
capacity building
5.2 Establishment of dedicated warehouses for Ghanaian good
Background
Problems related to clearing of goods at Lagos port adds considerably to the cost of
exporting to the largest consumer market in West Africa. Ghanaian companies do
generally not have the resources to establish and run warehouses with dedicated
personnel. Obtaining professional warehousing individually for every company exporting to Nigeria would represent a high and repetitive cost.
A pooling of resources between Ghanaian exporters could be an important step in establishing a warehouse for Ghanaian goods in Lagos port. Dedicated personnel could
manage and control the goods and ensure that they fulfil the clearance procedures.
Furthermore, the goods would be kept under constant surveillance, which would reduce the risk of theft.
Action
A suitable warehouse has been identified with the following estimated annual costs:
Rental: US$ 12,000, Security: US$ 12,000, Insurance: US$ 10,000, Management:
US$ 15,000. Total US$ 49,000. AGI will contact relevant companies that could be interested in such a facility.
Method of support
• Financial assistance for setting up the warehouse with management etc.
• Co-financing of costs of warehousing together with interested exporters.
5. Lack of an enabling
environment for Ghanaian exports
5.2 Establishment of warehouse for Ghanaian goods
5.2.1
Assistance
with establishment
of warehouse
5.2.2 Co-financing
of costs; staff, rent
etc.
5.3 Export promotion in ECOWAS countries
Background
Although most of the manufacturers seem to have considerable knowledge of the operation of ECOWAS and some of the basic protocols, there is the general lack of
68
knowledge on the part of manufacturers and exporters of the market opportunities in
ECOWAS countries.
A good number of manufacturers were sure that there is a large market potential in
the sub-region, but most of them could not give specific data on market size, target
group etc. to support their expectations. Companies normally sell to traders that
transport the goods across the borders and sell them to the end-users. In order to increase their knowledge of the regional markets, Ghanaian companies need to participate in sub-regional trade fairs and meet potential customers. Official information on trade and investment opportunities and market surveys are also not well developed.
Local companies that wish to export to the ECOWAS region also struggle with another problem. Potential customers often regard products manufactured in the subregion with scepticism. If the choice were between a European product and a product
from West Africa, many companies would prefer to buy from Europe. This is mainly
because products from sub-region are regarded as being of an inferior quality. This
problem can be alleviated if Ghanaian companies have the possibility of marketing
their products at regional trade fairs.
Action
AGI will identify interesting trade fairs in the sub-region and publish information on
the trade fairs to members. If the interest is sufficiently high, a number of trade
delegations will be arranged. Furthermore, an exporters handbook for selected countries in the sub-region should be prepared with information on topics such as relevant contacts, companies, regulations, procedures, etc.
Method of support
• Support for preparatory costs associated with arranging the delegations
• Part financing of participation and travelling expenses for companies
• Financing of an exporters handbook
5.3.1 Preparatory
costs
associated
with delegations
5. Lack of an enabling
for Ghanaian exports
0environment
5.3 Export promotion
ECOWAS countries
in
5.3.2 Support for
travelling expenses
5.3.3 Financing of
exporters handbook
69
7 Annexes
7.1 Annex 1: Status on contributions
Executive secretary budget
Member states
Benin, Burkina Faso, Côte d’Ivoire, Mali and Nigeria
Ghana
Biggest arrears:
Liberia
Mauritania
Sierra Leone and The Gambia
Cape Verde and Guinea-Bissau
Niger
Total arrears for secretariat
Status
Fully paid up
Arrears of US$ 1,973,020 (1989 and 1992
contributions)
20 years of accumulated arrears
15 years of accumulated arrears
11 years of accumulated arrears
10 years of accumulated arrears
8 years of accumulated arrears
US$ 38,4
ECOWAS FUND capital
First tranche
All member states except Liberia and Mauritania
Liberia
Mauritania
Status
Fully paid up
Arrears US$ 858,300
Arrears US$ 1,6 million
Second tranche
Benin, Burkina Faso, Guinea, Mali and Nigeria
Remaining 11 member states
Total arrears for FUND capital
Fully paid up
Total arrears of US$ 18,9 million
US$ 21,4 million
Special fund for telecommunications
Member states
All ECOWAS member states
Mauritania
Total arrears
Status
Fully paid up
Arrears of US$ 144,830
US$ 144,830
Loan payments to the ECOWAS FUND
Member states
Guinea-Bissau
Liberia
Niger
Nigeria
Total loan payments outstanding
Status
US$ 1,6 million
US$ 2,3 million
US$ 1,1 million
US$ 0,4 million
US$ 5,5 million
Construction of ECOWAS headquarters
Member states
Benin, Burkina Faso, Côte d’Ivoire, Guinea,
Mali, Nigeria and Togo
Remaining 9 member states
Contributions outstanding
Status
Fully paid up
Total arrears of US$ 4,6 million
US$ 4,6 million
70
7.2 Annex 2: Recommendations
Box 2.1: Recommendations of private sector associations
Investment
•
•
•
•
•
•
Governments should provide funds for the modernisation of stock exchanges
Rejuvenation of ECOWAS FUND
Support for development banking and funds for
industrial development
FWACC should be resuscitated
Harmonisation of investment laws
Ventures equal to ECOBANK should be pursued within airlines, shipping and pipelines
Infrastructure
The main issues discussed related to:
•
•
•
•
•
•
•
Establishment of an independent African communications system
Intelcom II should be a back-up for a modern
satellite communications system
Removal of all road blocks
Monetary issues
•
•
•
Removal of all barriers to free trade
•
Intensification of awareness plan for ECOWAS
travellers check
Government is encouraged to start on a rail project
•
Government should facilitate the setting up of a
regional air transport system
•
•
•
•
•
•
The group mainly discussed a streamlining of
bureaucratic procedures, but also emphasised
the need for an early invitation to Benin and
Togo to join the fast track.
•
A proposal for an investment and arbitration
centre for dispute settlement was also discussed
Governments encouraged to work towards attainment of convergence criteria for 2003 and to
create enabling conditions for the private sector
•
•
•
•
Protocol
WAIPS, which is to be introduced by the West
African Bankers Association in year 2000 was
noted as a viable private sector initiative.
Trade liberalisation
Revival of West African Road Transporters Union
Intensification of construction of the West African Gas Pipeline
WAMA was judged as an efficient payment system, which will be needed for accelerating regional integration.
Enabling legislation for TLS in Nigeria
Harmonisation of VAT in Ghana (10%) and Nigeria (5%) by April 2000
Disallowance of Pre-shipment inspection
(phased out in Ghana, still used in Nigeria)
Goods below a threshold value of US$ 500
should be traded without documentation
Nigeria should resume application of TLS
NACCIMA should sign certificates of origin in
Nigeria
Products licensed by the authorities in Ghana,
Nigeria should be included in TLS
Development of mutual certification schemes for
NSB’s and FDA’s
Standards should be emphasised and participation in CODEX and ISO improved
Implementation and monitoring
•
•
It was emphasised that a major problem for the
economies of Ghana and Nigeria has been a lack
of implementation, monitoring and follow-up.
The private sector should be represented in future committees that are to deal with such issues.
Box 2.2: Recommendations from investment promotion councils
• Privatisation of public utilities
• Greater autonomy for IPA’s
• Harmonisation of investment procedures
• Increased competition in the privatisation process
• Bilateral investment protection agreements
• Deregulation of the farming and mining sectors • Restructuring and re-capitalisation of ECOWAS
FUND
• Joint projects such as ECOBANK
•
Development of policies that will ensure adap• Dual listing on stock exchanges
tation, assimilation and innovation of technolo• Governments should encourage and enhance
gies
development of EPZ’s
• Establishment of an ECOWAS Technology Fo• Government should promote cross border inrum/Exhibition.
vestment
• NACCIMA and GNCC should revive FWACC
• Revision of ECOWAS Industrial Master Plan
• MAN and AGI should revive FEWAMA
71
7.3 Annex 3: Company Interviews - Ghana
•
•
•
Company: Ghana Textiles Printing Company Ltd. (GTP)
Person interviewed: Gilles Moisan, Managing Director
Product: Textiles
According to GTP, the Ghanaian market is not sufficiently large to justify investment. Companies should start by investing in Ghana and then move on to the rest of
the sub-region.
In terms of integration, GTP prefers to begin with the Ghana-Nigeria fast track.
Hereafter Ghana should integrate with UEMOA and finally with the rest of West Africa.
90% of the company’s production is exported to Benin, Togo and Niger out of which
80% is re-exported to Nigeria, which has proven to be the cheapest way to export.
The tax system is structured so that they only pay 30% duty if they export to Benin
and Togo, but 60% if they export directly to Nigeria. Therefore, harmonisation of the
tax system is very important to GTP.
GTP can compete with Nigerian products because their products are of higher quality. The 8 Nigerian textile producers cannot compete with the quality of Ghanaian
producers.
All the company’s transactions are conducted in either CFA francs or US$ since the
Cedi is “redundant”. Therefore a common currency is very important and would
make trade more efficient.
The company has used the duty-drawback scheme, but the amount of bureaucracy
associated with using it makes the effort to reclaim the money ridiculous.
GTP emphasises the importance to work with education and to speed up the West
African Gas Pipeline to Nigeria for better power supply.
•
•
•
Company: Alcatel Ghana
Persons interviewed: Nii A. Ayite, Managing Director and Henry D.
Aboagye, Export Manager
Product: Cables
Alcatel exports to Benin, Togo and Burkina Faso. Since the company has a sister
company in Nigeria, the export is very limited. However, Alcatel has experienced the
cumbersome process of exporting goods to Nigeria: Since transport by road and sea
was too slow, they once had to charter a plane in order to send the goods.
Alcatel spends an enormous amount of time on transport and customs procedures.
An example is import of PVC from Côte d’Ivoire: When a truck arrives at the border
the company has to call the environmental protection agency (EPA) in Accra and ask
them to take a sample back to Accra for testing. Then the sample is sent to the Standards Board for certification. Finally, the sample is sent to the Customs Board for
72
final approval. The EPA takes three days, Standards Board 1 day and customs 2-3
days. In addition, the approvals have to be sent back to the border. This means that
they normally spend at least a week getting a shipment through customs. In addition
to this there are several customs roadblocks on the road to Accra.
Since Alcatel still has to clear customs in Benin and Togo, free trade with Nigeria
does not make much sense. Therefore they feel that integration with Nigeria is not
the first priority for Ghana, but rather with the neighbouring countries or with the
UEMOA block.
There are other problems related to intra-regional trade. One of them is the tremendous problem connected to payment for goods. The regional banks are unwilling to
clear payments and often the payments have to be delivered directly at the factory.
Furthermore, the companies do not trust each other with payments. In order to
smoothen payment procedures Ecobank could play an important role, as they have
subsidiaries in most of the ECOWAS countries. The bank is, however, not currently
capable of making the guarantees. Alcatel already conducts all their foreign transactions in either CFA francs or US$. The Cedi is of no use to them.
The main priority for Alcatel is to establish faster customs and approval procedures
at the border. This should result in all the relevant documents being stamped in one
place, preferably at the border.
•
•
•
Company: Pioneer Food Cannery Ltd.
Person interviewed: Dr. Osei Boeh-Ocansey, Managing Director
Product: Canned tuna
Nigeria is an insecure and rather dangerous country. Therefore, Ghana should be
careful when integrating with Nigeria. Pioneer would prefer to start by integrating
with Côte d’Ivoire. Ghanaians and Ivorians are essentially the same people and language is not an argument for preferring Nigeria. But Ghana has never really made
an effort to integrate with Côte d’Ivoire, and even if the French and English foreign
ministers went on a joint visit to Côte d’Ivoire to accelerate integration, not much
has come of it.
Pioneer emphasises the need to build relations between the institutions in the different countries starting with the chambers of commerce and the industrial associations.
Most of the company production (85%) goes to Europe, because the ACP Treaty gives
them a competitive advantage. In addition, most of the products they sell in neighbouring countries are re-exported from Europe, which increases the price to a level
that only few people can afford. However, their future market is in West Africa and
they are very keen to start selling to the other markets in the sub-region. They have
sent a broker to Nigeria to investigate the possibilities for direct exports. Furthermore, they are acquiring a canning factory in Abidjan where they have three direct competitors.
Pioneer believes that Ghanaian companies have suffered for the common external
tariff that the UEMOA countries have implemented.
73
•
•
•
Company: Carsons Products West Africa Limited
Person interviewed: John E. Totoe, Managing Director
Product: Beauty care products
Previously importing their products from the US, Carsons are now producing in
Ghana and are mainly targeting the West African market. Their products are sold in
about 20 countries in Africa. Their biggest market outside Ghana is Nigeria, but are
also selling to Côte d’Ivoire and Senegal among others. They have also established
offices in Lagos and in Abidjan and the office in Abidjan manages the Frenchspeaking countries.
Transports to Nigeria are cumbersome and it sometimes takes them 4-6 weeks to get
a shipment from the factory to the distributor in Nigeria. It takes 1 week for a shipment to the port of Lagos, 2 weeks for clearing etc. In total there are 13 different authorities that have to be consulted at the Nigerian ports. They always calculated
costs of imperfection in transports into their budgets.
The company considers UEMOA the most efficient block and believes that Ghana is
not ready for a joint agreement with Nigeria and feels insecure about the success of
the fast track initiative. Ghana generally has products of higher quality compared to
other producers in the sub-region although Africans in general have been convinced
about the advantages of quality products.
In order to increase Ghanaian exports, the bureaucracy at the borders should be
dealt with and Ghanaians should be taught how to market their products. Furthermore, AGI should undertake an export opportunity study in the sub-region.
•
•
•
Company: Cocoa Processing Company Ltd. (CPC)
Interviewed persons: Paul. K. Awua, Managing Director and Peter Apeaning, Sales Manager
Products: cocoa products; mainly chocolate, drinking cocoa, etc.
CPC feels that the Ghana-Nigeria fast track is a step in the right direction for
ECOWAS and a natural result since the UEMOA countries have a tendency to exclude other countries from their integration process. One example is the UEMOA
tariffs that are very unfair to Ghanaian companies.
If companies want to export to Nigeria they can ship the products and avoid the hassles of road travel. CPC sells most of its products directly from the factory and do not
experience problems at the ports. Furthermore, they do not have any competition in
Nigeria and welcome an open market.
CPC uses US$ for most of their transactions outside Ghana. All imports are made
from Europe where the main imported products are sugar, milk and machinery. Customers pay in cash when they come to collect chocolate from the factory.
74
•
•
•
Company: TEMA Steel Co. Ltd.
Interviewed person: M. J. Patel, Managing Director
Products: Steel billets, recycled metal
TEMA Steel exports 25% of their production to Togo, but do not export to Nigeria
due to the very high freight costs.
The first priority in regional integration should be to strengthen infrastructure.
Roads are in a bad condition and have to be improved before it will be possible to export to other countries in the sub-region.
They have faced competition from products that are smuggled into Ghana from Côte
d’Ivoire, but the falling Cedi has eliminated the problem.
TEMA believes Ghana should become a member of UEMOA, where they stand a very
good chance of gaining market shares. In addition, there are no smelters in the
neighbouring countries.
TEMA’s Managing Director also owns a brick factory in Togo with an annual production of 1,2 million tons. The factory is located 5 km from the Benin border, but since
they are registered under the ECOWAS tariff scheme, they cannot use the UEMOA
tariff rate, which is lower than the ECOWAS tariff.
The company suggests that AGI should insist on practical solutions for transport of
goods. One of their main problems is the cost of freight. They can import billets from
Ukraine at US$ 40 per ton but it costs US$ 50 per ton to export them to Nigeria,
making their products non-competitive in Nigeria.
Currently the Cedi is only for internal use in Ghana. TEMA Steels transactions take
place in either US$ or CFA franc, but a common currency would make transactions
much easier.
The granting of ECOWAS tariffs is random. The company production of billets gets
the ECOWAS tariff whereas their production of iron rods does not qualify for the
ECOWAS scheme. They use an export promotion scheme where all income derived
from export gets a 20% tax rebate.
•
•
•
Company: Astek Fruit Processing Ltd.
Persons interviewed: Stella Owusu Aouad, Executive Director, and staff
Product: Juice, etc.
In terms of speeding up integration, Astek feels that it is a good idea to start with
the Ghana-Nigeria fast track.
Today, the company exports to Benin, Togo, Burkina Faso and Mali. In terms of
transport, Astek claims that it is better to ship goods to Benin instead of using road
transport as this involves less harassment. In addition, the paperwork at the border
is enormous and the roads are in poor condition. Therefore, it is better to transport
by sea.
75
They are thinking about starting exports to the Nigerian market. Currently, exports
to West Africa only account for 5% of their total production.
Ghana has allocated a special warehouse to Nigerian products in Tema port. The Nigerian goods are treated very well in Ghana and a similar warehouse should be created in Nigeria.
People from Burkina Faso buy directly at the factory. In general, cross border payments are a problem and access to foreign exchange is limited. Ecobank can be used
for transactions, but is not very efficient. Money posted at Ecobank in Benin are delivered in CFA franc in Ghana. To facilitate cross-border payments, the countries in
the sub-region need a common currency.
•
•
•
Company: Poly Products Ltd.
Interviewed person: Anil Mohinani, Director
Product: Plastics
Poly Products prefer to invest in Ghana and then continuing with exports to Nigeria.
However, the barriers to trade have to be removed first. But at present there is a
greater potential within other countries in the sub-region and the company is focusing on Mali, Burkina Faso, Benin and Togo. One should however keep in mind that
Nigeria is sufficiently interesting to attract investments on its own and this market
is opening very fast. Therefore plants will be opened in Nigeria only for serving the
Nigerian market.
The external UEMOA tariff has posed significant problems for the company. They
actually lose orders in spite of many inquiries from interested buyers in UEMOA
countries. The ECOWAS tariff should be 15%, but in reality it is 25%. In addition to
this one also has to calculate the cost of waiting time at the border and other indirect
costs, which often renders their products non-competitive.
They suggest that a good policy for AGI would be to forward proposals for speeding
up clearing time at customs and to reduce the tariff rates in the sub-region.
Duty drawback is reasonably easy, but it is necessary to keep a close check on all
transactions and do a good deal of paperwork. Any reasonably organised company
should be able to do this.
They import cartons worth US$ 250.000 per month but it is difficult to get the foreign exchange for such transactions.
•
•
•
Name of company: Panbros Salt Industries Ltd.
Person interviewed: Oheneba Gyemera-Amoako, Marketing Manager
Product: Salt
Panbros exports indirectly (i.e. through wholesalers) about 70-75% of its products to
ECOWAS countries, namely Niger, Burkina Faso, Benin, Togo, Côte d’Ivoire and to a
lesser extent Nigeria.
76
Ghana and Senegal are the only salt producing countries in the West African subregion. The total annual salt production from these two countries amounts to 350
Mt., out of which Ghana produces 250 Mt. and Senegal 100 Mt. Nigeria alone consumes about 950 Mt. annually, and over 96% of this is satisfied by imports. Nigeria
imports mainly from South Western Australia and Brazil.
South Western Australia used to subsidise their salt exports to Nigeria, but recently,
the subsidy has been removed and Nigeria now plans to import from Ghana. Recently Shell Nigeria Ltd. ordered 400 Mt. from Panbros, but the company lacks the
capacity to produce that quantity, (note that the two countries together produce only
350Mt.).
The implication is that there is a big market potential for salt in the sub-region and
therefore proper economic integration will help transform the salt industry tremendously. There are however so many trade barriers in the sub-region. Currently,
UEMOA countries impose 21% import duty on salt from Ghana, whereas salt from
Senegal is duty free. Despite the high duty rate, demand for Ghana’s salt is very
high because of its superior quality.
The formation of UEMOA has adversely affected the exports of the company to
ECOWAS countries, especially the UEMOA countries.
The company will not recommend Ghana to join UEMOA but efforts should rather be
made to harmonise ECOWAS and UEMOA so that the same conditions for intraregional trade will apply to all countries within the sub-region.
The company fully supports the Ghana-Nigeria fast track and trading with Nigeria
should be encouraged, however, the following should be addressed:
- Tariff should be harmonised between the two countries
- Physical barriers should be removed
- Custom procedures should be streamlined to ensure fast movement of goods between the two countries
The company has observed that transporting goods to Nigeria takes unreasonably
long time due to several physical barriers and sea transport is also very expensive
due to high costs of freight. Clearing procedure at the ports, especially the Nigerian
port, should be improved to curtail undue delays in clearing goods.
The NAFDAG Board - the Nigerian version of Ghana Food and Drugs Board - is extremely strict in issuing license for food exports, a ploy to support their local industries.
The various institutions should be harmonised such that certificates issued by one
institution will be recognised by all others.
The free zone system should be encouraged in both Ghana and Nigeria to facilitate
the integration process since there will be no differential trade tariffs.
The financial institutions should be involved in the process and ensure that they
play their expected roles in facilitating trade. A common clearinghouse should be established either in Ghana or Nigeria to facilitate payment for goods.
77
The insurance market for example is harmonised with the issuance of ECOWAS
green card. In the event of motor accident in any part of the ECOWAS sub-region,
the green card secretariat is able to handle the situation. In the same vein financial
institutions could be harmonised to operate in a similar fashion.
The company suggests that AGI’s role should include:
-
Stronger collaboration with their Nigerian counterpart, MAN
Create and strengthen sub-sector associations
Create a joint web-site for the associations to disseminate information
The company does not enjoy any export incentive from the government, neither benefit from the duty draw back scheme because it does not export directly (individual
wholesalers from the various countries are responsible for the exports.)
Donor agencies could assist in the establishment of a Central Reference Laboratory
for salt, which will be patronised by all countries in the sub-region, this will prevent
the use of product certification as a ploy to reject salt coming from other countries.
The donors could also assist two major banks, for instance, Barclays Nigeria, and
Barcalys Ghana to establish a proper clearinghouse. Such a move will help eliminate
possible conflict over which country the clearinghouse should be cited.
•
•
•
Company: UNILEVER
Person interviewed: Mr. Micheal S. Charamba, Technical Director
Product: Salt
Currently UNILEVER has made important investments in plant and machinery.
Raw materials have to be sourced from the sub-region for production. Likewise the
company plan exporting to ECOWAS countries, especially Nigeria, thus it is therefore necessary that the trading blocks are removed to enhance intra-regional trading.
It is a fact that tariff and non-tariff barriers imposed on goods from African countries
usually tend to be higher than those on similar goods from the western world.
The company supports the Ghana-Nigeria fast track and suggests that Côte d’Ivoire,
being the key player in UEMOA, should be involved in the fast track process, which
will encourage other UEMOA countries to join in. In addition, Côte d’Ivoire, being
next door, would be much easier to trade with than Nigeria.
Today, clearing goods at Nigerian ports is highly cumbersome. Therefore it is necessary to review the clearing procedures to reduce delays. To facilitate payment of
goods, the clearing system should be improved, which is an opportunity for the banking sector; the banks should develop strategies to finance intra-regional trading activities.
The regulatory systems have to be properly streamlined requiring proper understanding amongst the regulatory bodies so that goods certified by Ghana Standards
Board for instance will be accepted in Nigeria without undue harassment.
78
•
•
•
Company: Poly Products Ltd.
Person interviewed: Ebboe E. Botwe, Customer Service Manager
Products: Packaging materials, Water tanks etc.
Poly Products manufacturing division constitute four companies:
- Poly Products: L.P. rolls, shopping bags, biscuit wrappers
- Poly Sacks: rice, sugar and maize sacks
- Poly Tanks: overhead water tank, plastic bottles for drugs, gallons etc.
- Poly Kraft: corrugated boxes
The main export products are corrugated cottons of which 15-20% is exported.
The company has plans to set up a plant in Takoradi to service the Western part of
Ghana.
There is a big market potential for the company’s products in the sub-region, largely
because there are no plants in most West African countries producing similar products. In terms of number and size of manufacturing companies, Ghana is way ahead
of most countries in the sub-region. Smuggling is not a big issue; it is a problem for
producers of consumer products. However, smuggling affects the company indirectly,
since their clients are forced to reduce their production level, which in turn reduces
their purchase volume of packaging materials.
Currently, Poly Products export to Togo, Burkina Faso, and Mali and plan to export
to Nigeria as well. The first trial export has been made and the company is awaiting
the results from the importer. There are also plans to set up a plant in Lagos, Nigeria for the production of multi-layer foam. Even though the company has not conducted any thorough market study to assess the Nigerian market it believes it constitutes an important potential regarding the size of the population.
However these positive signals, there are two main barriers to trade confronting the
company the in sub-regional market; namely cumbersome custom procedure and
high cross-border tariffs imposed by UEMOA members. At present, UEMOA countries impose 25% on products coming from Anglophone countries.
Also the laid down standards and procedure are not clear, and regulations are deliberately changed to frustrate exports from non-UEMOA member countries.
On this background, Poly Products are not in favour of Ghana joining UEMOA and
are also concerned of the language and currency barriers. The company used to accept CFA for the payment of its products but had to stop because Ghanaian banks no
longer accept the currency. Regional banks should be established to facilitate trade
and such banks should accept currencies of all member countries. Ecobank, which
was established to play this role, has not lived up to expectation.
In order to facilitate trade, ECOWAS should introduce a common a currency. As it is
today, there are far too many physical barriers between ECOWAS countries, which
should be reduced if not removed completely
The Ghana-Nigeria fast track is feasible and should be supported by all. Currently
Ghana’s investment climate is more attractive to direct foreign investment than Ni-
79
geria and as such most investors would prefer to invest in Ghana rather than Nigeria. Ghana therefore stands to gain from the integration.
In spite of the barriers imposed by Togo and Benin, it is still better to trade with Nigeria than the immediate neighbours. Nigeria has a big market, which could be harnessed to the company’s advantage. However, effort should be made to negotiate
with Togo and Benin to allow safe and smooth transportation of goods across their
countries to Nigeria.
The company does not enjoy any tax incentive from the government. However, as the
company has a direct export of 15% as well as large indirect exports of packaging
material they should be entitled to some governmental tax incentives.
AGI should play a stronger advocacy role rather than an administrative role, and be
able to influence major government policy decisions. AGI’s role in the integration
process should be to collaborate more effectively with sister business associations to
encourage trading amongst the countries in general and members of the associations
in particular.
•
•
•
Company: DOMOD
Person interviewed: Paul-Victor Avudzivi, Sales Promotion Manager
Products: Aluminium products
DOMOD exports about 38% of its products to West African countries such as Togo,
Benin, Burkina Faso, Senegal, and to a lesser extent Nigeria. The company also has
plans to export to Liberia and has already made a trial export to Liberia.
The company does not export to Côte d’Ivoire because of trade barriers.
There is a market potential in the sub-region for cooking utensils and the company
has the capacity to increase production if the demand should increase in the subregion.
There is not any real competition from neighbouring states, as there are no silver
producing companies in most of these countries. Togo and Benin import virtually all
their silver products from Ghana. Ghanaian companies are competing for the subregional market.
Trade barriers are a big problem and require immediate attention if intra-regional
trade is to succeed. Traders from neighbouring countries benefit from the depreciating Cedi; they are also VAT exempt and are therefore encouraged to buy from
Ghana. The company does not benefit directly from the exports.
Another barrier is the high duty rate. Although the ECOWAS Treaty encourages
member states to allow registered companies operating in the sub-region to export
duty free, most of these countries impose high duty rates. One example is a company
that paid a duty of 51% on goods it exported to Togo.
The UEMOA countries seriously discriminate against goods from non-UEMOA
member countries. This is in areas of cumbersome custom procedure, associated with
delays and high tariffs. Togo for instance, does not seem to have a transparent and
clear-cut procedure in evaluating goods for payment of duty. For example DOMOD
80
participated in a fair in Togo. According to regulations the items brought in to Togo
were duty free and allowed entering as such. However, when it was realised that the
company was making good sales at the fair, the custom officials suddenly imposed a
high duty on all the products brought to the fair. In addition, the duty receipt issued
after payment was much lower than the actual amount paid.
DOMOD is of the opinion that Ghana should not join UEMOA because of language
and currency barriers. However, UEMOA and ECOWAS should be harmonised.
They encourage the fast track initiative. Since Ghana and Nigeria are two of the
largest English-speaking countries in the sub-region, stronger trade relation between
the two countries must be encouraged through conscious efforts by the authorities to
remove trade barriers and foster proper trade relations among others. One example
is to harmonise exchange rates to ensure smooth trade.
The company foresees a major problem in the Ghana-Nigeria fast track regarding
the difficulties that may pose Togo and Benin, who both are members of UEMOA.
Their commitment to the fast track process could be doubtful because of their
stronger commitment to UEMOA.
AGI should be seen as a strong force in the building of the economy of Ghana. AGI
should be able to put pressure on government to implement policies that will favour
the growth of the private sector, which has been widely acclaimed as the engine of
growth. As far as the AGI’s role in the integration process is concerned, the Association should be able to strengthen its relations with sister business association in the
countries involved.
Donor agencies can play an important role in the integration process. The donor
community can help set up an export finance bank purposely for ECOWAS member
countries. The idea is that such a bank could charge reasonable interest rates that
will be affordable to member countries and at the same time be financially sustainable.
A major factor that has to be taken into consideration when trading with Nigeria is
the attitude of the Nigerian businessmen. Most Ghanaians do not trust or have confidence in transacting business with Nigerian businessmen. If indeed this perception
is wrong then it must be discarded and corrected through education and proper reorientation.
For now, the company will only trade with Nigeria on condition that all goods purchased are paid with cash. The company will prefer setting up its own distribution
centre in Nigeria than to supply goods on credit to any Nigerian company. In this
connection, it is important to establish an arbitration centre to resolve disputes that
may crop up.
81
•
•
•
Company: Scanstyle Furniture
Person interviewed: M.A Pepera, Vice Chairman/Managing Director
Products: Furniture
Scantyle exports mainly to Europe but not to West Africa. The bulk of the company’s
raw material is also sourced locally with occasional imports from Gabon and Cameroon.
Some species of wood are not available in Ghana and are therefore imported from
Cameroon. There is however a problem with high transport costs, making it uneconomical to continue the importation.
There is no doubt that integration of West African countries is essential for economic
development of the sub-region. The physical/economic barriers to trade such as cumbersome custom procedures, numerous checkpoints and harassment at the borders
are obvious, and well known to the authorities concerned. But integration should be
looked at in a broader perspective. The concentration has always been on economic
factors, ignoring the social aspect, which is equally important for proper integration.
There is a general lack of confidence and respect between neighbouring countries.
Most ECOWAS countries are guilty of this. Even intolerance within countries exists.
In Ghana for instance, people of different tribes are discriminated. Even at the official level non-nationals are maltreated especially at borders of various countries by
security personnel. This attitude does not arguer well for promotion of business
among West African countries. There is a need for complete change in psychological
and behavioural attitudes, not only among security officials but also for people of all
countries in the sub-region in general. This can be achieved through proper education, exchange programmes and conscious efforts to make life pleasant for nonnationals in various countries.
Concerning the Ghana-Nigeria fast track, the social aspect of integration should be
looked at critically; there is a general distrust between Ghanaians and Nigerians.
The private sector requires funding to be able to improve its capacities on a more
sustainable basis and stay competitive in the global market.
82
7.4 Annex 4: Contacts
COMPANY/ASSOCIATION
CÔTE D’IVOIRE:
• African Development Bank
• African Development Bank
• African Development Bank
• African Development Bank
• African Development Bank
• Bourse Regional des Valeurs Mobilières (BRVM)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
CEPICI-Côte d'Ivoire Investment Promotion Centre
Chambre de Commerce et d'Industrie de Côte
d'Ivoire
CODINORM
CODINORM
CODINORM
DAFEXI
Diréction Générale des Douanes
Fédération Nationale des Industries et Services de
Côte d'Ivoire (FNISCI)
Fédération Nationale des Industries et Services de
Côte d'Ivoire (FNISCI)
Ministère de l'Industrie
Nestlé Côte d'Ivoire
OMNIFINANCE
SIFCA - Groupe Sifcom
SIPRA-Société Ivoirienne de Productions Animales
GHANA:
• AGI
• Alcatel
• Alcatel
• Astek Fruit Processing Ltd.
• Astek Fruit Processing Ltd.
• Bank of Ghana
• Carson Products West Africa Limited
• CEPS
• Council for Scientific & Industrial Research
• Databank
• DOMOD
• ECOBANK
• European Union
• Export Finance Co. Ltd.
• Export Finance Co. Ltd.
• Ghana Arbitration Centre
CONTACT PERSON
Jones Kadono Nyasulu, Transport Economist
Taisto Huimasalo, Executive Director
Touba Bedinger, Agro-Économiste Supérieur
E. G. Taylor-Lewis, Director
Diko Jacob Mukete, Principal Country Economist
Bah Amadou Tidiane, Responsable l'Antenne Nationale de Côte d'Ivoire
Raymond Y. Sibailly, Technical Advisor
Dr. Oguié Sain, Economiste/Directeur Général Adjoint
Jean-Joseph Kouassi Aka, Directeur Général
Jean Marcel Amoakon, Chef du Département
Jean-Joseph N'Goye, Ingénieur des T.P.
Mr. Fofana
Lucien Kaké, Administrateur des Services Financiers,
Directeur
Joseph-Désiré Biley, Président
Lakoun Ouattara, Chargé de mission
Mme Doukouré
Aboudramane Ouattara, Chef Service Import-Export
Jacob Amematekpo, Président & CEO
Nazaire Gounongbe, Directeur des Relations Extérieures
Jean-Marie Ackah, Directeur Général
Andrew E. Quayson, Executive Director
Henry D. Aboagye, Admin./Export Manager
Nii A. Ayite, Managing Director
Stella Owusu Aouad, Executive Director
Dr. A. A. Owusu, Chairman
Dr. Mahamudu Bawumia, Research dpmt
John E. Totoe
Evans Klutse, Chief Collector
Prof. W.S. Alhassan, Director-General
R. Yofi Grant, Executive Director
Paul-Victor Avudzivi, Sales Promotion Manager
Fitzgerald Odonkor, Group Trade Co-odinator
Alessandro Mariani, Economic Adviser
Emmanuel Asiedu-Appiah, General Manager
Kwasi Owusu Adjei Jnr., Managing Director
Nana Dr. S.K.B. Asante
83
•
Ghana National Chamber of Commerce and Industry
• Ghana Standards Board
• Ghana Standards Board
• Ghana Standards Board
• Ghana Stock Exchange
• Golden Tree
• Golden Tree
• Panbros Salt Industries Ltd.
• Pioneer Food Cannery Ltd.
• Poly Products
• Private Enterprise Foundation
• Private Enterprise Foundation
• Royal Danish Embassy
• Royal Danish Embassy
• Royal Danish Embassy
• Scanstyle Furniture
• Tema Steel Co. Ltd.
• The Poly Group
• The West African Enterprise Network
• The West African Enterprise Network
• The World Bank
• Unilever
• USAID
• Vlisco Ghana Group (GTP)
NIGERIA:
• Apex Mill/Thomas Wyatt Nigeria Plc
• ECOWAS
• ECOWAS
• ECOWAS
• ECOWAS
• Emzor Pharmaceutical Industries
• Faskol Chemical Company Limited
• Federal Office of Statistics - The Presidency
• Manufacturers Association of Nigeria
• Manufacturers Association of Nigeria
• Manufacturers Association of Nigeria
• Manufacturers Association of Nigeria
• MZOR Paracetamol
• MZOR Paracetamol
• MZOR Paracetamol
• MZOR Paracetamol
• Nigerian Foundries Ltd.
• S. A. Bolt Manufacturers
• The Nigerian Association of Chambers of Commerce, Industry and Agriculture
• United Nations Industrial Development Organisation (UNIDO)
• Winco Foam Industries Ltd.
Godfried Funkor, Research & Training Specialist
N. L. Hesse, Chief Scientific Officer
Anthony E. Owusu, Asst. Director Fin. & Admin.
Dr. J. M. Odonkor, Assistant Director
Yeboa Amoa, Managing Director
Paul K. Awua, Managing Director
Peter Apeaning, Sales Officer
Oheneba Gyemera-Amoako, marketing manager
Osei Boeh-Ocansey, Managing Director
Ebboe E. Botwe, Customer services Manager
Harry Owusu, Aministrative Manager
Moses K. Agyemang, Senior Economist
Ole Blicher-Olsen, Ambassador
Jørgen Carlsen, Programme Coordinator
Quame Adjei Kokroh, Programme Coordinator
M.A. Pepera, Managing Director
M. J. Patel, Director
Anil Mohinani, Director
Joyce Acheampong, Trade Information Coordinator
Tina Ababio, Administrative Director
Peter Harrold, Country Director
Michael S. Charamba, Technical Director
Fenton B. Sands,
Gilles Moisan, Managing Director
L. A. O. Osayemi, Managing Director
Frank Ofei, Deputy Executive Secretary
Akou Adjogou, Statisticien Economiste
Limane Barage, Head of Industrial Dptmt
Abdou Ali, Senior Customs Officer
Nkechinyee Ukoh, Chief Accountant
Dr. A. K. Fasina, President/Chief Executive
Mr. Leo U. O. Sanni
Jide A. Mike, Ag. Director General
Rasheed Adegbenro, Head, Corporate Affairs Dptmt
John Egwuonwu, Sectoral Secretary
Agatha Oduoza, Sectoral Secretary
Mr. Obijuru Sonie
Nkechinyee Ukoh, Chief Accountant
David Darku, Sales Executive
Tony C. Okonkwo, Personnel/Admin. Manager
Vassily Barberopoulos, General Manager
Rodney Wooldridge, Managing Director
L. O. A. Awodapo, Deputy Director General
Anton Sarbu, UNIDO (Representative in Nigeria and
Niger, and ECOWAS)
G. I. Okafor, Chairman/Managing Director
84
7.5 Annex 5: Bibliography
WEST AFRICA:
• 8th meeting of the Executive Council and 6th session of the General Assembly, FEWAMA, October 1993
• Accelerating Regional Integration in West Africa, Callisto Madavo. Vice President, Africa Region - The
World Bank, May 2000
• Accra Declaration on Creation of West African Second Monetary Zone, ECOWAS mini summit, April
2000
• ADF-VIII Guidelines on the financing of multinatioanl operations, ADB, May 2000
• Africa South of the Sahara 2000, Regional surveys of the world, 29th Edition, 1999
• Economic cooperation and regional integration policy paper, African Development Bank, May 2000
• ECOWAS at 25, ECOWAS, 2000
• ECOWAS handbook of International Trade 1998, ECOWAS Executive Secretary
• ECOWAS Industrial Master Plan: Orientations and action programme, ECOWAS, February 1994
• ECOWAS Trade Regime, ECOWAS executive Secretariat, 1990
• Entering the 21st Century-World Development Report 1999/2000, The World Bank, 2000
• Establishment of a second monetary zone in West Africa, The Technical Committee on Monetary Issues,
2000
• Final Communiqué – Mini summit of Heads of State and Government on the creation of a borderless
ECOWAS, ECOWAS Executive Secretariat, March 2000
• Final Communiqué, BCEAO Committee of Governors, May 2000
• Final Report, Ministerial meeting on free trade area, ECOWAS secretariat, March 2000
• Final Report on the Second Monetary Zone, ECOWAS, April 2000
• First West African Conference/Workshop on ECOWAS TLS scheme, IBCA and ECOWAS Secretariat, June
1998
• Ghana/Nigeria strategic cooperation initiative, UEMOA and ECOWAS, January 2000
• Good policies, bad environment, the Courier, issue 180, April/May 2000
• National Accounts of ECOWAS 1998, ECOWAS Executive Secretary
• Official Journal of ECOWAS, Vol. 3, June 1981
• Official Journal of ECOWAS, Vol. 6, December 1984
• Problems and prospects of trade finance in the West-African sub-region, Femi Ekundayo, Nigerian Financial Review, 1999
• Protocols annexed to the treaty of ECOWAS, ECOWAS, 1975
• Regional harmonization and integration of national policies for sustainable industrialization, with emphasis on SMEs, the environment, investment and technology promotion, draft 2, ECOWAS/UNIDO, 2000
• Report of the Nigeria-Ghana private sectors meeting on regional integration, Kola Daisi and Kwesi Ahwoi,
February 2000
• Report on FEWAMA seminar, AGI, April 2000
• The ECOWAS agenda – the way forward, Dr. Rufus F. Giwa, President - MAN, November 1999
• The ECOWAS agenda successes and challenges: an overview, Irene Maamah – Ministry of Finance, 2000
• The ECOWAS Trade Liberalisation Scheme, CTA Economic & Export Analysts Ltd., November 1992
• The Networker, The newsletter of the West African Enterprise Network, September 1999, vol. 7 no. 3
• The Networker, The newsletter of the West African Enterprise Network, March 2000, vol. 8 no. 1
• The role of business associations in moving forward the ECOWAS agenda, Andrew E. Quayson, Executive
Director – AGI, November 1999
• The vision of the African Development Bank, ADB, 1999
• Trade Liberalization, WAEMU Regional Integration, dakarcom.com, 2000
• Various Statistics on ECOWAS imports/exports Côte d’Ivoire/Ghana/Nigeria 1997/1998
• World Development Indicators 1999, The World Bank, 1999
• Yearly statistics ECOWAS 1998 – Total exports (comparative period 1999), Eurotrace, August 2000
85
CÔTE D’IVOIRE:
• Annual Report 1998, SIFCOM Group
• Bulletin officiel de la cote, Côte d’Ivoire Stock Exchange, August 2000
• Côte d’Ivoire/Mali Country Profile, EIU Country Profile, 2000• Invest in Côte d’Ivoire – the best of the new markets, CEPICI, 1999
• Investissons pour l’avenir, Côte d’Ivoire Stock Exchange
• Repertoire des normes ivoriennes 2000, CODINORM (CI Standards Board), January 2000
• Revue Trimestrielle 3 avril 2000 – 30 juin 2000, Côte d’Ivoire Stock Exchange
• The old enemies, The Economist, July 29th 2000
• Yearly statistics Côte d’Ivoire 1996 – Imports/Exports (comparative period 1997), Eurotrace, June 2000
• Yearly statistics Côte d’Ivoire 1998 – Imports/Exports (comparative period 1999), Eurotrace, June 2000
• Côte d’Ivoire/Mali Country Report, EIU Country Report, 2000
GHANA:
• A Study of the impact of the West African Economic and Monetary Union (UEMOA) on Ghana, Professor
S.K.B. Asante and Ambassador Alex Ntim Abankwa, October 1999
• Bank of Ghana Annual Report 1998, Report for the financial year ended 31st December 1998
• Bank of Ghana Quarterly Economic Bulletin, October-December 1999
• Ghana – Major macroeconomic indicators 1994-1999, Bank of Ghana
• Ghana Arbitration Centre, Ghana Arbitration Centre, June 1997
• Ghana Country Profile, EIU Country Profile, 1999-2000
• Ghana Country report, EIU Country Report, 1st quarter 2000
• Ghana Macroeconomic review and outlook, CEPA, 2000
• Ghana Physical and Social Geography, E. A. Boateng
• Implications of Regional Integration for Corporate Ghana, Kwamena Ahwoi – Minister of Planning, Regional Economic Cooperation and Integration, May 2000
• Imposition of ECOWAS Community Levy on imports originating from third countries, CEPS, 2000
Modalities and Strategies for co-operation towards ECOWAS integration, Ghana Stock Exchange, May
2000
•
Various statistics 1995-2000 (inflation, import/export taxes, budget deficit), Ministry of Finance
NIGERIA:
• A survey of Nigeria, The Economist, January 15th 2000
• Development of the Nigerian Market, John Totoe – Carson Products, April 2000
• Foreign Trade Statistics: January – December, 1999, Statistical News, May 4 2000
• MAN half-yearly Economic Review – January-June 1998, R. No. 23, MAN
• MAN half-yearly Economic Review – January-June 1999, R. No. 25, MAN
• MAN half-yearly Economic Review – July-December 1998, R. No. 24, MAN
• Memorandum of understanding between the NSE and the GSE, 1998
• Nigeria Country report, EIU Country Report, 4th quarter 1999
• On the members’ side, FIBV, Focus no. 87, April 2000
• Problems of the industrial sector, Dr. R. F. Giwa, President – MAN, February 2000
• Review of the Nigeria Economy 1998, Federal Office of Statistics, July 1999
• Strategies of MAN in moving forward the ECOWAS agenda, Uzor E. Okeke, Director General - MAN, November 1999
• The implication of the Uruguay Round for Nigeria’s export trade in manufacturing, Uzor R. Okeke, Director General - MAN, 1995
• The organised private sector year 2000- Pre-budget memorandum to the Federal Government of Nigeria,
NACCIMA/MAN/NECA, October 1999
• Total Exports Nigeria 1996/ 1997/1998, Eurotrace, 1996, 1997, 1998
• Total Imports Nigeria 1996/1997/1998, Eurotrace, 1996, 1997, 1998
• UNIDO Director-General’s visit to Nigeria – Official visit marked a new phase in development co-
86
•
•
•
operation between the federal republic of Nigeria and the UNIDO, 2-5 April 2000
Various trade statistics 1993-1997 (imports of selected commodities, imports/exports of petroleum products
etc.), Table 349-355, Federal Office of Statistics
Various trade statistics 1993-1997 (value of foreign trade, exports/imports by commodity section, import/exports by country of destination etc.), Table 343-346, Federal Office of Statistics
Various trade statistics 1998-1999, Federal Office of Statistics
87
7.6 Annex 6: Plan of Action for establishing a free trade area, January - December 2000
Title
of
Action
1. Implementation
of
ECOWAS
Liberalisation
Scheme
(TLS)
Activity
Period of
Execution
New Revised Period of
Execution
Institution Responsible for Execution
NIGERIA
GHANA
Action to be taken
Ministry
of
Finance/Private sector
Directives
have
been
given and it is incorporated in year 2000
Directives have been given
and it is incorporated in year
2000
Private Sector to monitor
full implementation and
report difficulty to Ministry of Trade/Commerce
1.
Appropriate directives to be given
to Customs in
year 2000.
Feb-March
2.
Authorised signatures for Certificate of origin to be
exchanged
between two countries.
Jan-Feb
7th July by
Nigeria
Ministry of Integration/Ghana Chamber of
Commerce, NEPC and
NACCIMA
NEPC had handed over
the issuance of certificate
of origin to NACCIMA
Ghana has submitted list of
specimen signatures to Nigerian authorities
The authorised signature
from NACCIMA to be
submitted to MPRECI
3.
Use of harmonised System Single Customs Declaration forms.
January
15th August
by Ghana
Customs /Ministry
Finance/Trade
of
Nigeria has complied with
the harmonised customs
nomenclatures and single
customs declaration forms
Ghana using the harmonised
customs nomenclature but
has not started using the
single customs declaration
forms
Ghana to ensure single
Customs declaration form
is in use
4.
Compilation,
Submission of Additional list of unprocessed goods;
live animals, perishable
agricultural produce –
vegetables, fruit
etc. to be exempted from certificate of origin
requirements
February
31st July, ongoing
Ministries of Integration/Finance/Private
Sector/ECOWAS Secretariat
Additional list has not
been done
Additional list has not been
done
The two countries have
agreed to submit additional list if any with the
involvement of the private
sector. Report of the initial review should be
ready by 15th July
5.
Exemption
March
Nil
Customs/Trade
Implementation has not
Implementation has not been
The experts had difficulty
of
Minis-
88
goods valued $500
or
less
from
documentation
requirements
–
certificate of origin etc.
2. Implementation
of
Community
Levy
try/Finance
been carried out
carried out
in the interpretation of
the decision of the Minisummit and the Ministers
directed that the matter
should be referred to the
ECOWAS Secretariat for
clarification
6.
Sensitisation,
provision of information
and
education of customs
officials,
economic
operators and borders
communities nationwide publicity
campaigns.
Feb-Dec
March-Dec
ECOWAS
Secretariat/Ministry of Finance National Chamber of Commerce
Action Commenced
Action commenced
On-going but need to be
monitored by the Chamber of Commerce of the
two countries
7.
Full implementation of ASYCUDA
System
End March
Nil
Customs/Finance
Action started and Lagos
port is fully connected
A new system that fully interfaces with ASYCUDA is
being implemented.
Both
countries
have
agreed to take immediate
action to harmonise.
8.
Joint meeting on
ASYCUDA/Custo
ms management
system of Ghana
To be determined
Customs/Central Bank
New activity
1.
Directives to be
given to customs
for collection of
0.5% levy
Jan-Feb
15th April
Ministry
of
nance/Customs
Fi-
The Ministry of Finance
has given directives to
Customs. Collection has
commenced
Provision made in 2000
Budget for collection awaiting approval by parliament
Collection has
commenced
2.
Opening of bank
account and sending account number
to
Customs/Finance
Jan
By 15th April
ECOWAS
Secretariat
Customs/Trade finance,
Ministry of Integration/Customs
Account has not been
opened but action is at
the final stage
Fully complied
Nigeria urged to expediate action on the opening
of account
3.
Lodging of proceeds in Central
Jan-Dec
(within one
April-Dec
Customs/Central Bank
Action pending
Fully complied
-
The two Min. of integration to facilitate meeting.
already
do –
89
3. Establishment
of
Common
External Tariff
4. Application of Inter-State
Road
Transit
Convention
(ISRT)
4.
Claim for Revenue
less
1.
month
of
collection
Customs/Trade
Finance, Ministry of
Integration/ECOWAS
Secretariat
Study has not been undertaken
Study has not been undertaken
ECOWAS Secretariat has
provided information on
rates applied by UEMOA
to Ghana.
15th Feb
Ministry of Integration
Study has not been undertaken
Study has not been undertaken
Both
countries
have
agreed to recruit consultant to study the implication of the CET
1st week of
March
Ministry of Integration
- do –
- do –
- do –
- do -
Mechanisms system developed but not launched
Guarantee system in operation. No customs escorts.
Nigeria to assist Ghana
produce her own log book
It will be expensive to
comply with axle requirement
Need to harmonise type of
vehicles used for transit operators (containers or tarpaulin).
Both
countries
have
agreed to use the existing
harmonised standard for
vehicles while the importation of new vehicles are
to meet the harmonised
standard as from 2001.
Meeting has been con-
Meeting has been convened
The
Study of national
tariff rates applicable imports
Jan-Feb
Oct
2.
Submission
of
study to Secretariat
3.
Organisation
of
meeting to harmonise the rates
4.
Adoption of Common
External
Tariff
Study of the two
Conventions
at
national level relating to
a) Functioning of the
mechanism
1st Jan 2001
Jan-Feb 6
Customs,
Transporters/Economic
operators/National executors
b) Conditions to be
met by vehicles
involved
2.
Organisation
of
ECOWAS Secretariat is
to develop a standard
form for claim of compensation for revenue loss
-
-
1.
ECOWAS Secretariat
-
-
1st week of
Ministry of Integration
Guarantee
mecha-
90
5. Application of the
Convention
on
Mutual
Assistance
in
Customs matters
6. Establishment
of
National Follow-up
Structures
7.
Free
movement
of Persons
meeting
between
Ghana, Togo, Benin
and Nigeria to agree
on implementation
March
in collaboration
ECOWAS
with
vened
nism is yet to be fully
concluded.
1.
Regular exchange
of information
From JanDec
(periodically)
Customs
Commenced
Commenced
The two countries are to
share and exchange information on drug trafficking and smuggling of
vehicles.
2.
Installation
of
web-site to facilitate exchange of
information
Feb end
Customs/Ministry
of
Finance/Ministry of Integration
The web-site is tied to the
completion
ASYCUDA
system is yet to be completed
Fully complied
Nigeria urged to expedite
action on the implementation
3.
Holding
regular
consultative meetings.
Jan-Dec
April-Dec
Customs/Ministry
of
Finance/Ministry of Integration
Commenced
Commenced
On-going
1.
Establishment of
national committees
and
subcommittees
to
monitor follow-up
of
implementation.
Feb
1st week of
May
Ministries
tion
of
Integra-
The process has started.
National committees and
sub-committees have been
established.
National committee structures have been established
Ghana should examine
Nigeria structure with
the aim of adopting it.
2.
Submission
of
composition
of
National Committees
to
Secretariat.
Feb
1st week of
May
Ministries
tion
of
Integra-
-
-
Both countries are yet to
inform ECOWAS Secretariat
1.
Use of ECOWAS
Travel Certificate
On-going
Continuous
Immigration
Fully complied
Both
countries
have
agreed to review downward the cost of the travel
certificate.
Action
be
taken to implement the
ECOWAS common pass-
Fully complied
91
8.
Food
and drug
Administration
port and visa without delay.
Both countries are to give
appropriate
directives
and sensitise operatives
regularly.
2. According 90-days
stay to community
citizens
at
entry
points
15th April
Do
Fully complied
Fully complied
3.
Removal of road
blocks
15th April
Do
Fully complied
Fully complied
On-going
4.
Sanitisation
of
borders
and
streamlining
of
procedures
15th April
Do
Fully complied
Fully complied
Not possible between
Ghana and Nigeria
5.
Residence
card
requirement.
15th April
Security Agencies
Yet to commence
Yet to commence
The meeting is recommending abolition in the
spirit of equal treatment
of community citizens.
Immigration services of
both countries are to put
in place a simplified registration system.
6. Joint border patrols
30th April
Security Agencies
Yet to commence
Yet to commence
Not possible between Nigeria and Ghana.
7. Meeting of Immigration officials
15th April
Ministry of Integration/ECOWAS Sec.
Yet to commence
Yet to commence
To be convened and report of meeting submitted
to
the
Ministry
of
Trade/Commerce
Standardisation
Food and Drug
of
By 5th July
2000
Food
and
Drug
Board/Administration of
both Ghana and Nigeria.
-
-
The meeting of both organisations would be held
on 20th and 21st June 2000
in Accra and report submitted to Ministry of
Trade/Commerce.
92
93