Tapping intra-regional agricultural trade potentials in West Africa
In the context of multiple crises, including the Covid-19 pandemic, political conflicts and wars, climate change, and environmental degradation, agrifood trade has become even more important. By moving food from surplus to deficit regions, trade provides an essential tool to offset crop failures – thereby improving food access, affordability and availability. Part of the resilience of agrifood systems depends on how different farming systems and zones are used to buffer shocks – which appear to be rising in frequency. Beyond these sector-related benefits, trade and regional integration have historically often been accompanied by the establishment of more stable political and economic systems.
Food price inflation and food security in West Africa
While global food prices have fallen somewhat from their peak in spring 2022, West African countries have not seen this trend mirrored within their domestic markets. In Ghana and Nigeria, for example, the year-on-year domestic food inflation rates stand at 48.7 and 24.6 per cent respectively. Even prior to these price surges, food expenditures already accounted for on average 50 per cent of total household spending in West Africa. This, along with the Covid-19 pandemic that has left many consumers poorer, is further exacerbating the challenges faced in advancing towards the achievement of Sustainable Development Goal 2.
After a period of progress in terms of food security, West Africa has experienced setbacks since 2015. In 2021, an alarming 247.4 million people, representing 60 per cent of West Africa’s population, have been affected by food insecurity, forcing them to compromise the quality or quantity of their food intake. At the same time, population growth is one of the fastest in the world. One reason for the deterioration in food security is unexploited agricultural production potentials and woefully insufficient investment in the agrifood sector. This results in import dependencies on staple foods and agricultural inputs, making the region vulnerable to shortfalls in the world market and global market price fluctuations. Soaring fertiliser prices, driven by skyrocketing energy prices, have become unaffordable for many smallholders. With armed conflicts in the region and food prices projected to remain at historically elevated levels, food insecurity is destined to continue to increase.
Potential gains from freer agricultural trade
The West African region offers a vast market that could foster economic growth and prosperity if regional trade barriers were removed and trade promoted and facilitated. Through freer intra-regional agricultural trade, producers could obtain higher prices for their produce, and boost their productivity and competitiveness – for example, by getting access to lower-cost production inputs. Among other benefits, consumers could enjoy a greater variety of food at more affordable prices. In addition, the market size of individual ECOWAS member states is often insufficient to exploit economies of scale in agro-food processing – one important precondition for developing a competitive agro-processing industry. Conversely, the entire ECOWAS region covers a big market, thus facilitating processers’ access to raw materials.
Despite the potential benefits of increased intra-regional agricultural trade, growing regional trade has been challenging because of structural issues such as inefficient institutions, poor infrastructure, inadequate financial markets, bureaucratic hurdles and politics. Ultimately, the implementation and enforcement of regional policies take place at the member state level and are driven by national and individual interests rather than regional commitments.
At the crossroads to regional integration
The political ambition to strengthen trade relations among West African nations and to advance regional integration culminated in the establishment of ECOWAS in 1975. ECOWAS is Africa’s oldest sub-regional bloc, comprises 15 countries, and is currently home to around 400 million people. With 66 per cent of all employment, the agri-food sector is the region’s biggest employer. It represents a total monetary value of 260 billion US dollars (USD), that is 35 per cent of West Africa’s Gross Domestic Product, and is projected to reach 460 billion USD in 2030.
Recorded intra-regional trade currently accounts for 12 per cent of total exports – compared to 59 per cent in Asia and 69 per cent in Europe – suggesting substantial room for improvement. However, case studies have shown that when unregistered trade volumes are included, intraregional trade is considerably higher than the official figures indicate. Why? Because trade costs in West Africa are overwhelmingly high. Existing agricultural trade policies between ECOWAS countries are not fully implemented, or if so, only in a non-transparent or incoherent manner. Non-tariff trade measures, dysfunctional customs transit procedures and poor logistical capacities result in long trade border controls and hold-ups, ultimately adding up to 30 per cent to the final consumer price. This is particularly relevant for perishable goods, such as fresh vegetables.
Milestones on paper are not enough
The ECOWAS members agreed on adopting several regional policies aimed at fostering and facilitating food trade within the region. These are, among others, the ECOWAS Agricultural Policy (ECOWAP), the ECOWAS Trade Liberalisation Scheme (ETLS), the Common External Tariff (CET), and the Protocol on Free Movement of Persons and Border Security. While some progress has been made to overcome structural challenges in regional trade, such as road infrastructure projects like the Abidjan-Lagos corridor, implementation at the borders still poses several challenges: trade restrictions are imposed, the ETLS is insufficiently implemented, and non-tariff barriers and protocols such as phytosanitary standards remain unharmonised.
For effective implementation of existing policies, sustained cooperation between the ECOWAS Commission and the relevant national ministries in the member states is essential. In addition, comprehensive guidelines for harmonised national implementation of agricultural trade policies, for example through the issuance of implementing directives within the ECOWAS trade regimes, are required.
The GIZ ECOWAS Agricultural Trade project
In order to support the ECOWAS Commission and its member states on their path to greater regional integration, economic development, improved social and economic conditions for women, as well as improved food security through agricultural trade, the project “ECOWAS Agricultural Trade” (EAT) was officially launched by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in March 2023. By employing a multilevel and multistakeholder approach in collaboration with the ECOWAS Commission and its members, the private sector, and civil society, the project focuses on three main pillars: policy advice, trade facilitation and trade promotion. It will promote evidence-based policy-making and work with local and regional organisations, supported by the Sahel and West Africa Club (SWAC) Secretariat of the Organisation for Economic Co-Operation and Development (OECD) and the International Trade Centre.
With a pragmatic bottom-up approach, EAT aims at facilitating trade flows by bringing policy-makers, border staff and the private sector together while specifically focusing on women in trade. This is to enable marginalised groups to reap greater tangible benefits from regional trade. Moreover, EAT will focus on the untapped potential of unregistered trade, building trade capacity for dealing with border inspections and controls and having better access to cross-border markets. Furthermore, the project will strengthen trading communities, e. g. by promoting and empowering small-scale traders’ access to finance, improving business skills and solving technical problems such as compliance with norms and standards, traceability or packaging requirements. Working alongside other donor-funded programmes, EAT seeks to promote regional integration through agricultural trade, focusing on downstream approaches in the value chain towards market, consumer, and food security-driven solutions based on viable business models for small and medium enterprises (SMEs).
Drawing upon existing approaches and knowledge, EAT will work on enhancing and adding value through a combination of capacity building, soft infrastructure, policy advice and dialogue. Together with regional and national partners, best practices and solutions to allow agricultural trade across borders to improve regional food security are to be showcased. Examples include training for food traders to comply with national standards when crossing borders, simplified custom control procedures for perishable goods and fast lanes for individual traders at borders. Finally, supporting and safeguarding female traders is key to women’s economic empowerment. This can be achieved by creating safe spaces along trade corridors and informing women and assisting them in taking advantage of their rights.
Tailwind from AfCFTA
The ratification of the African Continental Free Trade Area (AfCFTA) has injected fresh impetus into the ongoing efforts to facilitate trade, now with a comprehensive continental perspective. ECOWAS holds a pivotal role as a fundamental building block for the successful implementation of the AfCFTA. The CET has served as the foundation for the tariff negotiations of ECOWAS member states under the AfCFTA. Moreover, ECOWAS coordinates the AfCFTA negotiations and acts as a mediator in instances of disagreements among member states. However, the genuine value of trade agreements lies in their ability to yield tangible improvements and outcomes on the ground. Hence, the paramount objective is centred around the national implementation and harmonisation of these agreements across different countries.
Kristina Mensah is a freelance consultant for agricultural and trade policy. She obtained her BSc in nutrition and food sciences and her MSc in agriculture and food economics at the University of Bonn, Germany.
Jonas Wittern is an advisor at GIZ in the Sector Project Agriculture. He holds a BSc in agricultural sciences and an MSc in agricultural economics from Humboldt-Universität zu Berlin, Germany.
Arne Schuffenhauer is the team leader of EAT and is based in Nigeria. He is a Diploma Engineer in international agronomics with working experience in South Africa, Cameroon and West Africa.
Kareem, Olayinka Idowu and Wieck, Christine (2022). Mapping agricultural trade within the ECOWAS : structure and flow of agricultural products, barriers to trade, financing gaps and policy options. A research project in cooperation with GIZ on behalf of BMZ.