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POLICY NOTE NO. 36 MARCH 2013
Africa Trade Policy Notes
John Keyser
Regional Trade of Food Staples and Crop Inputs in West
Africa
Rising prices for basic food products are back in the headlines and when
HIGHLIGHTS food prices go up poor consumers in Africa, who spend the majority of their
income on simple foodstuffs, suffer. Rising food prices are also having
WEST AFRICA IS
SIGNIFICANTLY BELOW ITS important macroeconomic impacts on many African countries since more
POTENTIAL IN REGIONAL and more food is being imported from the global market leading to
TRADE IN FOOD STPALES. …
Locally grown maize, for worsening balances of trade. This issue is not going to go away. Demand for
example, only accounted for 3% food in Africa is projected to double by 2020 with consumers increasingly
of recorded ECOWAS imports located in rapidly growing cities.
from 2005-2009.
Fortunately, as the World Bank shows in its recent report, Africa Can Help
REGIONAL TRADE OF SEED
Feed Africa, the continent does have the means and opportunities to deliver
AND FERTILIZER IS ALMOST improved food security to its citizens. If African farmers were to achieve the
NON-EXISTENT IN WEST yields that farmers attain in other developing countries, the output of food
AFRICA … staples would easily double or even triple thereby creating new income
By harmonizing fertilizer blends opportunities for farmers and reducing Africa’s dependence on imports
across countries and encouraging from the rest of the world. For this to happen, however, farmers need to be
local blending capacity, West better linked to both inputs and to consumers. Often the nearest source of
Africa could realize a savings of demand is a across a border yet fragmented regional markets and lack of
at least USD 30-40 per ton.
predictable trade policies deter much needed private investments –
including small investments by poor farmers in raising productivity to large
PETTY AND ORGANIZED
CORRUPTION ADDS TO THE
investments in input supply, seed multiplication, and food marketing. Given
COST OF REGIONAL TRADE… that different seasons and rainfall patterns are not conveniently confined
in Ghana, small traders say it within national borders, and that variability in production is expected to
common practice to pay GHS increase with climate change, facilitating cross-border trade is more
4.00 to 5.00 per bag to avoid important than ever to provide farmers and traders the opportunities and
inspection and paperwork incentives they need to supply Africa’s rapidly growing demand for staple
requirements. commodities.
This note looks at the regional trade situation for food staples and crop
inputs in West Africa and types of barriers that need to be overcome for the
WORLD BANK
region to achieve its potential in food trade.
1| www.worldbank.org/afr/trade
Despite having some of the lowest per hectare potential. Table 1, provides an overview of West
yields in the world, many places with good growing Africa’s imports of selected commodities and shows
conditions already produce food surpluses that are that most internationally traded foods originate
not traded internationally due to various from outside the region. Locally grown maize, for
constraints. Following an overview of current trade example, only accounted for 3% of recorded
conditions, the note uses the example of Ghana to ECOWAS imports from 2005-2009 and probably
show how only a modest reduction in trade costs no more than 10% of total imports including
for fertilizer could have a significant (and informal transactions outside the legal system.
sustainable) impact on rural incomes and Although many parts of West Africa are deficit in
agriculture competitiveness. The final part of the maize, surpluses in high production zones that
note then describes a few key areas where relatively could help meet the shortfall often go untraded
clear-cut policy changes and institutional reforms because of high costs, fragmented markets, and
could help set West Africa on a path to realizing its other trade barriers. In Table 1, a greater share of
full potential in agriculture production and trade. total imports of millet and sorghum originate in
other ECOWAS countries, but even for these
Current Trade of Food Staples commodities, value chain experts say that large
quantities go untraded because it is easier and
Most regional food trade in West Africa currently
cheaper for breweries, stock feed manufacturers,
involves small consignments being traded in
and other buyers who need a regular supply to
informal value chains based on personal and/or
import from outside the region.
linguistic ties. These movements range from simple
cross-border deals between extended family and
tribe members to some very long distance Table 1: ECOWAS Imports of Basic Foods by
transactions along traditional corridors that can Region (2005 to 2009)
extend over thousands of kilometers and multiple Other ECOWAS Rest of World
border posts. Precise figures are difficult to come Maize 3% 97%
by, but in the Ashaiman market near Tema, Ghana, Millet 38% 62%
for example, women traders say that a dozen or so Sorghum 21% 79%
individuals travel to northern Togo once or twice Livestock 98% 2%
Source: Compiled from Bromley, et. al. (2011).
per month to buy 20-50 bags of cowpeas to sell in
their market stalls and to other domestic traders.
Regional experts likewise report that Burkina Faso Indicative of these limited trade connections, there
exports some 20,000 to 40,000 tons of maize to are frequently large price differences from one
Niger and Mali in most years with lesser volumes West African country to another. During the 2008
flowing into Benin, Ghana, and Togo depending food crisis, for example, prevailing market prices
on annual supply and demand conditions. An for maize in the farm areas of southwestern
established trade corridor for maize between Burkina Faso stood at only USD 280 per ton
Techiman, Ghana and Niamey, Niger was also said against USD 640 to 750 per ton in major coastal
to exist (1,100km across two borders) while cities from Accra to Lagos. Similarly, in 2010,
considerable volumes of sorghum were reported to millet prices in Accra were around USD 660 per
go all the way from Kano, Nigeria to Dakar, ton against USD 260 to 360 in the northern
Senegal (3,600km across four borders). Onions and production zones of south-central Mail and
tomatoes are also widely traded in regional markets. northern Burkina Faso. Although West Africa has
some of the highest transport costs in the world,
Despite the importance of these transactions, it is these large price differences cannot be explained by
apparent the overall volume of regional food trade transport alone.
in West Africa is low and significantly below its
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With respect to livestock, Table 1 shows that a very have a direct bearing on the price that can be paid
different situation prevails with 98% of imports to producers, and thus rural incomes and potential
originating from other ECOWAS countries. In this for growth and poverty reduction. Unlike East and
case, several thousand goats, sheep, and even cattle Southern Africa, there are few, if any, large-scale
are shipped every day along traditional trade commodity brokers involved in regional trade of
corridors from Sahelian countries to deficit zones food staples in West Africa, and few impersonal
in coastal areas. Like grains, these transactions are institutions of the type needed for traditional
mostly informal and involve high costs so lead to traders to switch from one corridor to another to
low producer prices and high consumer prices that take advantage of new business opportunities.
limit the potential for growth and poverty
reduction. With more and more people in West The World Food Programme (WFP) is probably
Africa living in large cities, policies to improve the the largest regional trader in West Africa and seeks
efficiency of regional livestock markets also need to to procure a variety of staple foods for its relief
be a high priority for the future. operations. In practice, however, WFP reports
there are frequent problems obtaining the required
In both the livestock and grain markets, most export permits, quality certificates, and other
regional trade in West Africa relies on social, documents needed from different countries for
linguistic, and even family bonds. Even very long- large transactions to succeed. Small traders mostly
distance trade deals are typically based on oral avoid these requirements, but this is not possible
contracting and, especially in the livestock sector, for large commercial traders including the WFP
may involve credit sales so require strong who need to comply with all rules and regulations.
interpersonal relations. In these deals, commodities Procurement of large quantities at a competitive
often change hands five or six times between the price has also been a problem for WFP since this
farm and retail level with each intermediary usually has to be done through government-
incurring costs and needing to make a profit from controlled agencies. In 2010, for example, the
the transaction. Re-bagging, for example, is typically Government of Ghana offered rice to WFP at
done each time grain is sold since there are no USD 970/ton fob Tamale against the world market
other guarantees for quality or even basic price of USD 550/ton cif Monrovia where the
composition. Volumes are typically measured by supplies were needed. WFP is obliged to buy
the number of bags or tins per bag rather than in regional grain when possible, but this very high
kilos or metric tons. In physical terms, most traders offer was considered uncompetitive and the deal
work in small lots that range in size from just a few was eventually stopped after exporting just 1,600
bags (300-400kg of grain) to perhaps one or two full tons of a 4,000-ton procurement.
truckloads at most (say 60-80 tons).
Regional Trade of Seed and Fertilizer
While it is clear these trading systems are well
adapted to local conditions and institutional realities With respect to crop inputs, regional trade of seed
in West Africa, it is equally apparent that the lack and fertilizer is almost non-existent in West Africa.
of more systematic and larger-scale trading options Under the ECOWAS Trade Liberalization
imposes a high cost on the region. In an open Scheme (ETLS), Member States agreed to reduce
economy, price is determined competitively and the barriers to regional trade of crop inputs, but in
value flows upstream from the consumer to each practice governments still enforce national product
producer and marketing agent in the chain. All registration and testing requirements that make
costs and profit margins taken by processors, regional trade difficult and expensive.
traders, and other value chain participants before
In the case of seed, for example, the ECOWAS
the product’s value reaches the farm level therefore
Council of Ministers formally adopted a Regional
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Agreement on Harmonized Seed Legislation in at least USD 30-40 per ton (USD 1.50 to 2.50 per
May 2008 under which any variety of seed 50kg bag). Moreover, given that fertilizer
registered in one ECOWAS country would be application rates in West Africa are among the
eligible for production and commercial sale any lowest in the world, any savings in trade costs would
other ECOWAS country without further likely contribute to much higher crop yields simply
certification or testing. Almost five years later, as a result of more farmers being able to afford at
however, the reality is very different whereby least some product even if it is not always the most
regional governments still only recognize their own ideal type. According to the Ghana PPRSD, local
test results. In Ghana, for example, the new Plants blends are designed to help farmers achieve
and Fertilizer Act of 2010 specifically requires all maximum yields and the cost of preparing each
varieties of seed to be tested domestically for a formulation is not considered when approving new
minimum of three years regardless of whether the products.
variety has been approved in another ECOWAS
country. Seed companies pay the full cost of this Input subsidy programs in different countries
service equal to a minimum of USD 3,500 per year further complicate the trade situation with much of
for expression of interest and seed entry plus the the fertilizer that does go across regional borders
full cost of all materials used in on-station and travelling illegally. In the current 2012/13 crop
farmer field trials agreed with the Plant Protection season, for example, Ghana is subsidizing 176,000
and Regulatory Services Directorate (PPRSD). tons of fertilizer for non-cocoa crops at a cost of
When asked about the ECOWAS Seed around USD 64million. In practice, however, even
Agreement, staff at PPRSD explained there has the Ministry of Agriculture and Food acknowledges
been “some discussion�? of harmonized trade there have been problems with smuggling and,
policies for seed but said these talks were at a very according to the Ghana News Agency, less than
early stage. In effect, most countries do not yet have 25% of the 1,700 tons of fertilizer meant for small
a Seed Act and, in Ghana, the Act of 2010 farmers in Kassena-Nankana District ended up in
contradicts the 2008 ECOWAS Agreement. local soils with the rest smuggled to Burkina where
it could be sold for two times the subsidized price.
Similarly, although West African countries produce Bearing in mind that subsidies can have many
very little fertilizer and must rely on extra-regional positive effects, these programs are inherently
imports, opportunities for regional trade and expensive to run and carry an ever-present risk of
distribution are constrained by a range of factors leakage so also give good reason to look for
including country-specific product formulations and complementary and more sustainable ways of
national testing and registration requirements. reducing prices such as improving the regional
While different soils and crops naturally need trade environment.
different amounts of nutrients for optimal growth, a
recent study by the International Fertilizer Fertilizer Trade and Rural Incomes in Ghana
Development Center (IFDC) and International
To illustrate how efforts to reduce trade costs could
Food Policy Research Institute (IFPRI) shows that
have leveraged impact on agriculture
product differentiation in West Africa has taken
competitiveness and rural incomes, it is useful to
place for non-technical reasons. As a result,
stick with the example of Ghana where information
different blends have to be custom made for each
on the cost structure of fertilizer and farm
country at a very small scale, which add
production costs for the 2009/10 season is
unnecessarily to production cost and price. By
available. The point of this quick example is not to
harmonizing fertilizer blends across countries and
recommend specific alternatives to Ghana’s subsidy
encouraging local blending capacity, the authors
program, but to demonstrate how even a modest
estimate that West Africa could realize a savings of
reduction in trade costs could go a long way to
4| www.worldbank.org/afr/trade
achieving many the same objectives as a subsidy structures, Fuentes, et al (2011), found that up to
without being drain on the national budget. 50% of the commercial price of fertilizer is
accounted for by market constraints and
First, Table 2 shows the estimated build-up of bottlenecks. The 8.2% price reduction modeled
fertilizer prices in Ghana under two trade scenarios. here is therefore a conservative estimate of the
The base scenario reflects actual conditions that savings that could be realized from regional policies
prevailed in the 2009/10 agriculture season in such as the introduction of harmonized fertilizer
which the unsubsidized price of NPK fertilizer was blends, streamlining of import procedures, and
around USD 39.00 per 50kg bag. The reduced cost savings on transport costs. Potential savings on
scenario, on the other hand, reflects the type of finance charges and improved domestic marketing
savings that could realistically be achieved through are not included in this analysis yet offer further
various trade improvements. In a detailed study of potential for price reduction.
the Ghana fertilizer market and underlying price
Table 2: Build-up of Fertilizer Prices in Ghana under Alternative Trade Scenarios
Base Scenario Hypothetical Reduced Cost
(2009 prices) Savings Scenario
Structure USD/ton % savings USD/ton Structure USD/ton
International procurement and blending 20% 156.00 -20% (31.20) 17% 124.80
Port services and stevedores 18% 140.40 -5% (7.02) 19% 133.38
Credit for procurement 32% 249.60 - 35% 249.60
Domestic transportation 21% 163.80 -15% (24.57) 19% 139.23
Distribution/retail margins 7% 54.60 - 8% 54.60
Other (clearing charges, etc) 2% 15.60 -5% (0.78) 2% 14.82
Total 100% 780.00 (63.57) 100% 716.43
Total reduction as % base price = 8.2%
Source: Own calculations based cost structure reported by Fuentes, et. al, 2011.
Next, Table 3 presents a set of financial indicators medium- and high-input farmers than under base
for medium and high-input hybrid maize using the conditions respectively. For medium-input farmers,
base price of fertilizer and hypothetical 8.2% the savings on trade costs translates to USD
reduction modeled above. For this analysis, 12.08/ha higher profits while for high-input farmers
production costs and returns are based on Ministry the savings on fertilizer results in USD 24.16/ha
of Food and Agriculture crop budgets a farmgate extra profit. In Scenario 2, it is assumed that the
price for maize of USD 160/ton (GHS 30/kg). lower price of fertilizer leads to 10% more use per
Unless indicated, all values are expressed in USD hectare and 15% higher yields. Under these
per hectare. conditions, per hectare profits would be USD 52.88
higher at the medium-input level and USD 108.16
As demonstrated, Ghana could derive significant greater at the high-input level. For medium-input
benefit from effort to improve trade conditions for farmers, this change is equivalent to transforming
fertilizer. In the first place, Scenario 1 shows how maize from a loss-making activity into a profit
an 8.2% reduction in fertilizer costs would result in making one in net terms. As a percent change, the
44% and 17% higher gross and net profits for
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Table 3: Financial Indicators for Ghana Hybrid Maize (USD/ha)
Medium input High input
Fertilizer use (bags basal x top dress per ha) 2x2 4x4
Base conditions
Crop yield (tons/ha) 1.70 3.50
Total revenue 272.00 560.00
Variable costs 244.48 421.93
Family labor & depreciation 47.34 56.38
Gross margin (total revenue - variable costs) 27.52 138.07
Net profit (gross margin - family labor & depreciation) (19.82) 81.69
Scenario 1 - Streamlined trade procedures (8.2% savings on fertilizer)
Crop yield (tons/ha) 1.70 3.50
Total revenue 272.00 560.00
Variable costs 232.40 397.78
Family labor & depreciation 47.34 56.38
Gross margin (total revenue - variable costs) 39.60 162.22
Net profit (gross margin - family labor & depreciation) (7.74) 105.84
Scenario 2 - 8.2% savings on fertilizer, 10% more use, 15% more yield
Crop yield (tons/ha) 1.96 4.03
Total revenue 312.80 644.00
Variable costs 232.40 397.78
Family labor & depreciation 47.34 56.38
Gross margin (total revenue - variable costs) 80.40 246.22
Net profit (gross margin - family labor & depreciation) 33.06 189.84
Farmgate price = USD 130/ton (GHS 30/kg).
Scenario 2 increment is equal to a 134% increase in
income for medium-input farmers and 64% guarantee that incremental profits will flow all the
increase for high-input farmers. way up the chain to farmers, Scenario 1 shows how
an 8.2% reduction in fertilizer costs would result in
Finally, Table 4 looks at the total available profits more than five times as much total profit being
for regionally traded maize from a value chain available per ton of exportable grain at the medium-
perspective including the costs of primary assembly input level. With high-input management, total
(transportation from the farm to a nearby collection profits per ton of export grain would be around
point, a short period of storage, handling, and 31% higher. In Scenario 2, the total available profits
preparation of essential export documentation). For per ton of exportable maize would be around
this part of the analysis, total accumulated costs at thirteen times higher with medium-input
the assembly point exclude profits paid to farmers management and 76% greater with high-input
and local traders. This approach allows total management. Similar results would apply to maize
accumulated costs to be subtracted from the export grown as an import substitute and the analysis
parity price to show how much total profit is overall clearly shows that modest improvements in
available to flow upstream to farmers and other trade conditions for fertilizer could have significant
value chain participants. Unless indicated, all values tangible benefits for farmer incomes and regional
for this part of the analysis are expressed in USD trade competitiveness.
per ton of tradable grain.
Again, the data demonstrate that Ghana could
realize significant benefits from efforts to streamline
trade procedures for fertilizer. Although there is no
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Table 4: Value Chain Indicators for Ghana Hybrid Maize (USD/ton tradable grain)
Medium input High input
Fertilizer use (bags basal x top dress per ha) 2x2 4x4
Base conditions
Crop yield (tons/ha) 1.70 3.50
Farm costs 171.66 136.66
Assembly costs (incl. documentation and storage) 62.55 62.55
Total value chain costs for export ready grain 234.21 199.21
Total available profit at export parity 2.79 37.79
Scenario 1 - Streamlined trade procedures (8.2% savings on fertilizer)
Crop yield (tons/ha) 1.70 3.50
Farm costs 164.55 129.76
Assembly costs (incl. documentation and storage) 62.55 62.55
Total value chain costs for export ready grain 227.11 192.31
Total available profit at export parity 14.89 49.69
Scenario 2 - 8.2% savings on fertilizer, 10% more use, 15% more yield
Crop yield (tons/ha) 1.96 4.03
Farm costs 143.09 112.83
Assembly costs (incl. documentation and storage) 62.55 62.55
Total value chain costs for export ready grain 205.64 175.39
Total available profit at export parity 36.36 66.61
Export parity = USD 358/ton cif Ouagadougou less USD121/ton for transport and road fees.
For Scenarios 1 & 2, assume USD 5/ton less road fees from improved trade environment.
Opportunities to Improve Trade Conditions There needs to be better awareness and adherence
to trade rules. Presently, there is a lot of confusion
Bearing in mind regional agriculture trade is in West Africa over the requirements to move food
constrained by a great many things it is worth staples from one country to another. Very often,
reviewing some of the areas where clear-cut policy border officials and even trade advisors do not
improvements or other institutional change could know the correct procedures and will quote
help West Africa realize the type of benefits different rules depending on who is on duty. The
described above. There is a considerable body of use of certificates of origin to achieve duty free
literature describing different trade constraints and status under the ETLS appears to be a particular
large gaps that frequently exist between stated area of confusion. Truckers complain that officials
policies and actual trade practice in West Africa. at the same border post sometimes request for a
This brief note cannot possibly provide an certificate of origin for community-originating
exhaustive account of all that needs to be done, or cereals when at other times they do not. This type
even what could be done, to improve the regional of inconsistency not only leads to unnecessary costs
trade of food staples and crop inputs. Instead, the and opportunities for corruption, but also makes
aim is to highlight key areas of strategic importance trade risky for large and small-scale operators since
where governments and other regional stakeholders it is difficult to know what documents will be
could reasonably expect to reduce trade costs and required on any given day of the week.
create a more reliable environment over the next
few years to the benefit of farmers and small- and To help improve awareness, the USAID
large-scale traders alike. Agribusiness and Regional Trade Promotion (ATP)
project produced a wallet-size card listing the
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requirements for regional food trade that it Box 1: Regional Trade Requirements
distributes to traders (see Box 1).
ECOWAS Rules for Documents for Trading in
In a similar initiative, the regional NGO, Staple Foods Trade Staple Foods
Borderless (which was set up and funded in part by Customs duties – NO ECOWAS Brown Card
the ATP project) publishes its own pamphlets that VAT or sales tax – NO (insurance) – YES
list the requirements for importing products to Statistical tax – NO Export declaration – YES
Ghana at Aflao. Many of the documents listed by Computerization fee – Phytosanitary Certificate
NO – YES
ATP, however, are not listed by Borderless and Freight forwarder fee Waybill – YES
vice versa. Borderless, for example, does not – YES Natl. and intl. driver’s
mention the need for a phytosanitary certificate and Transit fee – NO license – YES
instead says that all agriculture products must be ISRT logbook – NO Certificate of Origin – NO
certified by the Ghana Customs and Excise and Weighbridge fee – YES ISRT logbook – NO (and
Preventative Services (CEPS) Laboratory or Ghana Official road tolls – NO transit fee)
Standards Authority (GSA). Traders in turn YES
describe the CEPS/GSA inspection as being about
phytosanitary control and say that officers will carry Source: USAID ATP
out a visual inspection to look for pests even when Project
they have the required phytosanitary certificate other users for a copy of each product specification.
from Togo. GSA directors say this is the usual practice of
standards bodies all around the world, but (apart
While both the Borderless and ATP initiatives are from the lost revenue) could easily make pdf copies
important steps in the right direction, there available on their website that would go a long way
evidently needs to be greater coordination to to building a constituency for standards and,
ensure that information given to traders is complete ultimately, to improving regional trade conditions,
and accurate. In the above example, GSA standards product quality, and competitiveness.
covering quality attributes such broken or shriveled
grains and total defect are a completely different Governments need better commitment to free
matter from phytosanitary standards concerned trade. Beyond the problem of confusion for
with human, animal, and plant disease. The mixing everyday trade rules, there is a larger issue of
of these aspects by GSA and CEPS officials no governments themselves not always being
doubt contributes to the opaque trade environment committed to free trade. Many countries in West
and is a specific area where trade facilitation Africa, notably Burkina Faso and Mali, often
projects like Borderless and ATP could help implement seasonal export bans on cereals. As of
improve transparency and understanding. late 2012, for example, Burkina was reported to
have export bans on both rice and beans. Likewise,
Dissemination of product standards by official in Ghana, the WFP reported that it had been
agencies is another area where much could be done waiting since the end of August for a permit to
to make trade conditions more transparent. Putting export 10,000 tons of maize to Niger without a
aside the danger of making quality standards reply from government. In another example of
mandatory (particularly if modeled on developed how governments have departed from regional
country norms), voluntary standards can be used as trade agreements, Benin was until recently charging
a language between traders and benchmark for transit duty on all goods that pass through its
determining value. Nevertheless, the GSA and borders even though this is specifically not allowed
other national standards bodies do not make their by the ETLS.
work public and insist on charging traders and
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Addressing the problem of limited will to Box 2: Costs of Regional Trade on the Ghana to
Nigeria Corridor
implement regional free trade agreements is likely
to be one of the more intractable trade constraints. In a survey by the USAID Trade Hub, truckers on the
Even though trade bans are seldom successful in Ghana to Nigeria Corridor said they have been
asked to pay the following formal and informal
achieving their objectives and have been shown to charges to transport food products.
have many negative effects including increased food
1. Administrative Tax (1% fob)
price volatility, many governments continue to
2. Association of Customs Agents Levy
implement these polices in the name of food 3. BIVAC
security and other political objectives. 4. Certificat d’origine
5. Certificatd’origine douane
As such, the best that may realistically be expected 6. Certificat sanitaire (phytosanitary/SPS)
in the near term could be to help traders cope 7. CNCB
better with the risk of bans. Often trade bans are 8. Commune
poorly communicated meaning that traders and 9. Convoy Fee/Escorte
10. Custom Agent
even border officials do not know what the real
11. Declaration/quittance
situation is and an obvious first step would be to 12. Ecor
improve communication of when bans are put in 13. Ecotax
place and when they are lifted. A second area for 14. ECOWAS tax
improvement would be to make implementation of 15. Enregistrement
16. Entry Tax
trade bans more predictable. This may be difficult
17. Finance Charge for Reimbursables
to achieve, but efforts to define a set of verifiable 18. Gendarmerie Levy
conditions under which governments could exercise 19. Hygiene & Sanitation
their discretion to implement a trade ban could be 20. Import Card
a good area for dialogue, especially if systems were 21. Laisser Passer
geared to provide an early warning of when a ban 22. NAFDAC
23. Parking/Stationnement
may be put in place.
24. Passage BMA
25. Passage magasin douane
On a day-to-day basis, there also needs to be better
26. PC
commitment to free trade by frontline border 27. Police Levy
officials, police officers, and other control agents. 28. Priseen charge
Mercantilist attitudes that see the only good kind of 29. Redevance informatique
trade is export trade still hold sway across Africa 30. Section visite
31. Sortie
and efforts to build awareness of the importance of
32. Standards Organization of Nigeria
free trade could help avoid shipments being held 33. Statistical Tax
up on spurious grounds. Petty and not-so-petty 34. Taxes de déclaration
corruption not only adds to the cost of regional 35. Taxes globales
trade but can also render improved trade rules 36. Taxes Supplémentaire
meaningless if the procedures are not 37. Tolls/Péage
38. Transit Fee
implemented. At Aflao, small traders say it
39. Veterinarian Tax
common practice to pay GHS 4.00 to 5.00 per bag 40. Visa
(about USD 21.30 to 26.60 per ton) to use the back
Source: West Africa Trade Hub, 2012, p. 24.
channel to avoid inspection and paperwork
requirements. In another example, clearing agents
GSA Officers for their inspections to “go fast�?.
in Tema say standard procedure is to pay GHS 100
Although each cost may seem minor and better
to 200 (USD 53 to 106) per container to CEPS and
than being delayed, these charges add up and have
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a significant impact on competitiveness and permit based on a common list of pest risks would
profitability. therefore be a good approach for ECOWAS.
Other regional economic communities in Africa
As a strategy for reducing illegal costs, Borderless including the EAC, COMESA, and SADC, have
has been publishing quarterly reports on the each begun to harmonize their SPS rules using
number of controls, cost of bribes, and delays along different approaches and offer useful experience on
13 major trade corridors since 2007. Borderless what works, what doesn’t work, and what should be
says this strategy of naming and shaming has helped avoided. COMESA, for example, is in the process
reduce costs over time, but acknowledges that of developing a “green pass�? system for regional
much more needs to be done to change attitudes SPS certification and ECOWAS may do well to
and make formal rules more transparent and easy look at this approach.
to navigate. In one of its recent reports, the USAID
West Africa Trade Hub lists all of the charges
truckers reported paying on the Ghana to Nigeria Box 3: Poor Utilization of Trucks
corridor and more systematic monitoring of these Truck operators only make money when wheels are
fees (including duplicate fees paid at borders) could turning. The average monthly distances covered by
be a useful way to build on the name and shame transporters in different parts of Africa are shown
strategy (see Box 2). below:
11,000 – 12,000km per month for domestic
Develop clear rules that are easy to meet every day. transport within South Africa
One very practical area where much can be done to 8,000 – 9,000km per month for international
make regional trade rules easier to follow is to transport within Southern Africa (e.g. South
adopt harmonized rules and regulations. One Africa to Zambia via Zimbabwe or Botswana)
5,500km per month in Eastern Africa
notable barrier in agriculture is that ECOWAS
2,500km per month (at best) for transport
does not have a regional agreement on sanitary and between Ghana and Mali or Niger
phytosanitary (SPS) standards. As a result, traders
Source: Bromley, et. al. (2011).
are often required to pay for more than one SPS
certificate and/or obtain multiple inspection stamps.
UEMOA adopted a Framework SPS Agreement in
2007 and a pressing challenge now for ECOWAS
Another important lesson is to avoid making
is to adopt its own harmonized regulations.
regulations that cannot be easily implemented. This
Given the historic trade ties that exist between West point may seem obvious enough, but is a particular
African countries and fact large amounts of food concern in West Africa where institutional capacity
presently go around the formal system without any is often very weak. Other than SPS, for example,
inspection at all, a regional approach based on one trade constraint that donors often point to is
equivalence and mutual recognition of each other’s the lack of harmonized quality standards. While
SPS systems would likely be more meaningful than quality standards are important for ensuring
any attempt to harmonize with developed country product safety and can be useful in determining
norms. Although the WTO SPS Agreement value, recent experience in EAC shows there is a
encourages Member States to harmonize their SPS significant risk of introducing mandatory
standards with international ones, it stops short of requirements modeled on advanced country
making this a mandatory requirement. Simply put, conditions that are difficult for local farmers and
African countries have very different SPS problems traders to meet or that consumers do not want and
than developed countries do and only limited cannot afford. In the worst of conditions, these
capacity to tackle their SPS problems. Efforts to standards not only add unnecessarily to cost, but
develop a simple system for issuing a regional SPS can even become a trade barrier and new vector for
10| www.worldbank.org/afr/trade
corruption. Like the EAC, the Ghana Standards environment. High transit costs including escort
Authority has modeled most of its food standards requirements and the need to pay (and reclaim)
on the International Codex Alimentarius, but now multiple customs bonds and have been a particular
says it is revising its standards for maize to allow problem and should not even apply to staple foods
higher tolerance for total grain defect in line with or other products with duty free status. Another
local realities. Unlike the EAC, there have not yet area for improvement is the regional insurance
been any serious attempts to develop harmonized system whereby truckers are required to obtain an
regional standards by ECOWAS or UEMOA ECOWAS Brown Card to be covered outside their
countries. home country, but say it is nearly impossible to
make a claim when they need to.
Continue the fight to reduce transport costs. A final
important problem for agriculture trade that cannot Conclusions
be overlooked is the high cost of transportation.
Compared with manufactured goods and high-value This note sought to provide a concise overview of
cash crops, food staples usually have a low value to current trading conditions for food staples and crop
weight ratio so are particularly vulnerable to any inputs in West Africa and to highlight tangible
inefficiency in the transport sector. While much opportunities for improvement. The example of
can still be done to improve road infrastructure in reduced trade costs for fertilizer helped to illustrate
West Africa, physical limitations are increasingly that trade facilitation is not just an esoteric pursuit
viewed as less important than policy. In an but can have very significant, real life implications
exhaustive study of the regional transport sector, for for poverty reduction and food security. To the
example, Bromley, et. al. (2011) show how a host extent that savings on imported fertilizer can
of factors ranging from the outdated truck queuing substitute for spending on subsidy programs, trade
system to excessive regulations of vehicle operators, facilitation can also have an important impact on
corruption at multiple checkpoints, and poor agriculture budgets and ability of governments to
condition of vehicles contributes to West Africa deliver extension advice and other core services
having some of the highest transport costs in the needed for agriculture growth.
world (see Box 3).
While there are a number of simple steps
Roadblocks and control points are a particular governments can take, improving the regional trade
problem. In its 20th Road Governance Report, environment will require a long-term commitment
Borderless reported that truckers paid an average and strong political will. Just as the costs of
of USD 4.40 in bribes, encountered 1.8 corruption and extraneous procedures are obvious,
checkpoints, and suffered 16 minutes of delays for so too are there vested interests in the status quo
every 100km travelled in the second quarter of and rents these systems generate. It is therefore
2012. Some countries, of course, did worse with important for West African leaders and agriculture
Mali recording USD 10.40 in bribes and 22 stakeholders more generally to stay focused on the
checkpoints per 100km, against USD 1.42 in bribes ultimate objective of free trade and social benefits
and 10 checkpoints in Togo. In Ghana, traders improved trade systems can bring.
encountered 20 checkpoints and paid USD 1.47 in
In this regard, a useful strategy for each country
bribes per 100km.
would be to define a set of actions to achieve its
While initiatives such as regular Road Governance trade goals in coordination with regional partners
Reports have done much to raise awareness of the around which the international community could
impact of unofficial charges and led to the organize appropriate support. Given the practical
elimination of some checkpoints, much more challenges of policy reform, part of the process
needs to be done to improve the transport policy should involve defining clear outcomes/indicators
11| www.worldbank.org/afr/trade
for each action item. These can be used to monitor made in West Africa to build awareness for the
progress and to hold officials and leaders high costs of roadblocks and control procedures,
accountable to commitments they make to deliver complementary efforts to increase awareness for
open regional markets for food staples. Concrete the benefits of free trade are also important for
actions to build a constituency for free trade will Africa to realize its potential to feed itself.
also be important. While good progress has been
12| www.worldbank.org/afr/trade
About the Author
John Keyser is an independent consultant based in Lusaka, Zambia. This work is funded by the Multi-Donor
Trust Fund for Trade and Development supported by the governments of the United Kingdom, Finland,
Sweden and Norway. The views expressed in this paper reflect solely those of the authors and not necessarily
the views of the funders, the World Bank Group or its Executive Directors.
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