Trade facilitation in West Africa
Title: Promoting Trade in West Africa II (WATIP II)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Countries in West Africa, based in Nigeria
Lead executing agency: ECOWAS Commission
Overall term: 2018 to 2022
The Economic Community of West African States (ECOWAS) was established 40 years ago. Since then, international trade has made a huge contribution to economic development and prosperity worldwide. This potential needs to be harnessed for economic development in West Africa, too.
The region’s trade potential is reflected by its young and growing population and its wealth of natural resources. However, the necessary political framework is often lacking or is not implemented effectively. As a result, the trade potential, particularly for intraregional trade, cannot be fully harnessed. Up to now, trade in the region has been characterised by high transaction costs, custom duties and non-tariff barriers to trade such as quantitative restrictions. High administrative costs due to non-standardised and non-harmonised trade regulations and practices pose a further problem. Statistics show that exports from ECOWAS countries only accounted for 0.5 per cent of global exports in 2017, highlighting the marginal role that the region plays in global trade. The same is true of trade within West Africa: only 10 per cent of exports from the region were traded within West Africa.
Regional traders are confronted with overlapping and multiple reporting obligations, which are time-consuming, unproductive and hard to understand; all of which causes considerable costs. A well-structured trade facilitation programme can reduce these costs and hence help increase the volume of trade in West Africa.
The project is part of the Trade Facilitation West Africa Programme (TFWA) and is being financed by the European Union (15 million Euro) and the German Federal Ministry for Economic Cooperation and Development (BMZ) (4 million Euro).
The ECOWAS Commission contributes increasingly towards implementing regional resolutions on trade and customs policy at national level, in dialogue with government, civil society and private sector stakeholders.
The project cooperates with the ECOWAS Commission to implement trade-enhancing measures in three areas:
- It supports the development and effective implementation of regional policies and instruments for trade facilitation, such as the ECOWAS Common External Tariff and the ECOWAS Trade Liberalization Scheme. In addition, the project is eliciting support for the dismantling of trade barriers, including gender barriers, at political level by promoting increased exchange between the private sector, civil society and the ECOWAS Commission.
- The project promotes the efficient transport of goods in selected trade corridors. The Dakar-Bamako Corridor was selected as a pilot project to implement the IT-assisted ECOWAS interconnectivity system SIGMAT. The system permits automated data transmission of transit-relevant data. Moreover, the project supports the work of the joint committee led by the private sector in the Dakar-Bamako Corridor through capacity building measures.
- The project supports the ECOWAS Commission in entering into an active dialogue with the private sector to address trade-specific concerns and promote the role of private actors in the trade facilitation process. It also cooperates with private institutions that represent the interests of regional traders to build their capacity in the field of trade facilitation.