The World Bank has published a policy note, in March 2013, reviewing constraints on expanded production and trade in staple food crops in West Africa. The note highlights how most of this trade is small scale and traded informally, based on personal and linguistic ties. While this trade can traverse thousands of miles and cross multiple borders, it often involves only small amounts. For example, Burkina Faso is reported to export 20,000 to 40,000 tonnes of maize a year to Niger and Mali, with lower volumes to other countries depending on seasonal factors. While ECOWAS figures are likely to be an under-estimation, given the nature of informal trade, it is clear that most cereal imports are sourced beyond ECOWAS.
The World Bank maintains that surpluses in high production zones often remain untraded because of high landed costs on deficit markets, with importers finding in easier and cheaper to source from beyond the region. These limited trade connections give rise to huge price differentials for cereals across West Africa (often two to three times higher).
ECOWAS imports of basic cereals by origin (2005–09)
Rest of world
Source: compiled from ‘Regional agricultural transport and trade policy study’, West Africa Trade Hub Technical Report No. 41 (March 2011), cited in World Bank (2013) paper, Table 1, p.2.
While current trading systems are well adapted to local realities, the absence of large-scale trading operations raises the cost of intra-regional supplies. Large-scale purchasers such as the World Food Programme reportedly face major problems in securing the necessary permits and certificates to source regionally, making regional sourcing uncompetitive.
The paper notes that similar problems are faced for trading in crop inputs. Despite an ECOWAS agreement to liberalise trade in inputs under the ECOWAS trade liberalisation scheme (ETLS), national regulations still continue to take precedence over regional agreements. This is the case even when new regulations have been drawn up after the ECOWAS commitments were made. This prevents major cost savings (of up to 50%) from being achieved, and undermines scope for yield improvements.
The World Bank policy note identifies a number of areas for remedial action, including:
- strengthening national commitments to intra-regional trade liberalisation at the operational level, particularly through
a) the abandonment or establishment of greater transparency of seasonal export bans;
b) greater transparency in export and import licence regimes;
c) the dismantling of transit charges;
d) dismantling illicit roadblocks and combatting corruption by border officials;
- greater harmonisation of sanitary and phytosanitary (SPS) and food safety standards, and withdrawal of application of additional non-SPS/food safety standards to trade in cereals;
- improving knowledge and application of statutory requirements for cross-border trade in cereals;
- clarifying and publicising the relevant origin requirements under the ETLS.
The note recognises that, given the fundamental nature of many of these challenges, the focus in the short term may need to be on helping traders to cope better with these constraints. In this context, there is felt to be a need to define “clear outcomes/indicators for each action area… to hold officials and leaders accountable” to commitments made.
While strategies for sustainable growth in cereals production in West Africa need to get to grips with reducing the costs of farming inputs, enhancing productivity and improving first stage on-farm storage and processing capacities, there is equally a need to reduce the costs of moving large volumes of grain from cereal surplus to cereal deficit areas, if efforts to boost local production are not to be undermined by a localised price collapse.
A large number of studies have identified the multiplicity of causes underlying the high costs of trading cereals across West Africa, and nominal policy commitments have been made to addressing a number of these challenges. However, these commitments are often honoured more in the breach than the observance.
The critical challenge is how to establish mechanisms to ensure the day-to-day application of policy commitments or, as the World Bank policy note puts it, how to help traders to cope better with the constraints faced.
Strengthening private–public sector cooperation along key transportation corridors and at border crossing points could assist. In this regard a rich experience exists in other regions of Africa. Indeed, in West Africa a start has been made under the ‘Borderless’ initiative supported by the USAID West Africa Trade Hub in association with ECOWAS, WAEMU and the World Bank.
Experiences elsewhere in Africa range from the major transport corridor initiatives in Eastern and Southern Africa (e.g. the Maputo corridor programme), through sector-based cooperation between government departments and private-sector-based, trade-focused forensic investigation service companies (e.g. Agri Inspec) in South Africa, to the joint deployment of government and private sector officials at border posts (e.g. the cooperation between the Agronomic Board and Customs Service in Namibia).
In view of the expanding regional demand for cereals, it is implicit in the World Bank analysis that if the West African region’s growing dependence on cereals imports is to be reduced, then the political will has to be mobilised to change existing ingrained practices along entire supply chains.