67999 POLICY NOTE NO. 30 MARCH 2012 Africa Trade Policy Notes Mombert Hoppe and Francis Aidoo Removing Barriers to Trade between Ghana and Nigeria: Strengthening Regional Integration by Implementing ECOWAS Commitments HIGHLIGHTS IN WEST AFRICA… Global markets offer important opportunities for companies in regional integration has lagged behind developing countries. By exporting to larger markets, the companies can expectations, and many political commitments have either not been increase production, growth, and employment at a faster pace than by translated into policy and regulatory focusing only on smaller domestic markets. But companies in reforms, or reforms are not developing countries must overcome severe hurdles before being able to implemented. export to global markets. GHANIAN MANUFACTURERS believe the key barriers to increasing In this context, regional exports can be an important testing and learning trade with Nigeria include substantial ground for these companies. This is because barriers to accessing informal payments and delays, transit markets in the region are often lower than those for accessing global charges, and requirements for markets; neighboring countries' markets are often similar in taste, product registration. Nigerian traders have long criticized discriminatory standards, distance, and culture. Creating regional markets can thus treatment when setting up trading allow companies to expand operations and create economies of scale, companies in Ghana, claiming that making them more competitive. Gaining access to regional markets also protocols relating to the free increases incentives for more investment flows, and permits suppliers to movement of people and the right of establishment are only partially specialize and integrate into regional supply chains that ultimately cater implemented. to both domestic and international markets. TO STRENGHEN TRADE … In addition, it is often more feasible politically to reduce trade barriers between Ghana and Nigeria, existing within a region rather than across global markets. But addressing commitments should be fully regional trade barriers and strengthening regional integration also helps implemented and laws will have to be countries to integrate into world markets. This is because barriers to applied. And transparency and better regional trade are often also barriers to trade with the world. complaint mechanisms will have to be at the heart of any initiative. In West Africa, both the processes, and degree of regional integration have lagged behind expectations, and many political commitments have either not been translated into policy and regulatory reforms, or reforms are not implemented. The region thus remains weakly integrated, with continuing tariff barriers (for example where restrictive rules of origin cannot be met) and substantial non-tariff barriers WORLD BANK 1 | www.worldbank.org/afr/trade There is still no agreement at the ECOWAS level companies in Ghana that we interviewed to on the precise structure of the common external understand the difficulties of exporting to Nigeria tariff, and the existing scheme for regional free under the scheme. Complaints about the lack of trade faces significant challenges. implementation of existing commitments are consistent but often vague. This note looks at the regional integration process in West Africa, focusing on Ghana and Nigeria. The study finds that Ghanaian manufacturers Both countries account for about 61 percent of believe the key barriers to increasing trade with population and 68 percent of GDP in ECOWAS.1 Nigeria include substantial informal payments and They are already closely linked, with bilateral non- delays — regardless of whether documentation is oil trade between the two countries increasing from complete — transit charges, and requirements for less than US$15 million before 2000 to more than product registration. Despite the relatively small US$130 million in 2010, according to sample size, we conclude are confident that these COMTRADE data. While the share of non-oil findings, which support recent findings by the West exports from Ghana to Nigeria increased from less Africa Trade Hub, also apply to a wider range of than 0.5 percent in the late 1990s to about 1.9 economic operators in Ghana. percent of global exports in 2010, a recent working paper estimates the potential for Ghana’s exports to Implementing existing commitments in Ghana and Nigeria at more than 10 times of current exports Nigeria, and facilitating trade flows between them, and the potential for bilateral trade at twice the would be a critical move towards achieving freer observed flows.2 trade and deeper integration within the region. Getting policies right in these two large and Beyond trade, substantial migration flows between dynamic economies should be a priority within a both countries have existed for a long time. Recent policy dialogue that focuses on regional integration estimates put the number of Ghanaian emigrants in in West Africa because it will likely become a Nigeria at 125,000 (IOM 2009), which represent 13 catalyst for deeper integration across that region. percent of Ghanaians living outside Ghana, and the number of Nigerians living in Ghana at more than The remainder of this note is structured as follows: 50,000 (DRC 2007).3 First, we give an overview of current trade policies and commitments undertaken as part of the This note assesses the challenges that goods regional integration process before looking at the exporters within the region face when trying to implementation of these commitments in West benefit from the ECOWAS-wide Free Trade Area. Africa. We then turn to the central part of this note, It focuses on the experience of 30 exporting describing our findings on the specific difficulties that Ghanaian companies face when exporting to Nigeria. Last, we offer policy recommendations to 1 Côte d’Ivoire, the third largest economy in the region, is slowly emerging from a long conflict. address the challenges identified. 2 See working paper by Adam and Twneboah (2008). Trade policies and the regional framework within West Africa 3 These numbers seem to be a conservative estimate. The Nigerian High Commission in Ghana has repeatedly said that Without an agreed Common External Tariff (CET) more than 1 million Nigerians live in Ghana. In 2008, the University of Ghana reported that nearly half of their 1,100 or a functioning customs union in West Africa, foreign students came from Nigeria (IOM 2009). 2 | www.worldbank.org/afr/trade countries apply their own tariff schedules.4 Ghana now covers all products of community origin, and and Nigeria have largely aligned their tariff aims to ensure free movement of goods and schedules to what will likely be a CET, but persons within ECOWAS. differences remain. According to COMTRADE data, the simple average of Ghana’s external tariffs However, the share of intra-regional trade has is 12.7 percent, while that of Nigeria is 11.9 remained low, with around 10 percent in percent. However, Nigeria levies an additional duty ECOWAS. WAEMU, the more strongly integrated of up to 100 percent on 245 lines, increasing the group of French-speaking economies within average tariff to 13.0 percent. In addition, Nigeria ECOWAS, is more integrated, with about 11 applies import bans on roughly 10 percent of tariff percent of trade being intra-regional, despite the lines at the 6-digit level (Hoppe and Pitigala 2011) smaller size of this economic area (Goretti and and is now considering additional duties on some Weisfeld 2008). After more than two decades, the products. Compliance with standards remains ETLS still faces a substantial number of challenges burdensome, and there have been reports of and lacks implementation, as a recent report by the standards being used as disguised protectionist West Africa Trade Hub (2010a) demonstrated. measures. However, because of data constraints, To benefit from the ETLS, companies need to neither country has an aggregate measure of the show that they meet the restrictive rules of origin importance of non-tariff measures. specified under the scheme. Companies can In the absence of a functioning customs union, the register their products using a lengthy, two-staged Free Trade Area (FTA) governs intra-regional trade approval process (first by a national committee that relationships — and the ECOWAS Trade forwards the decision to a regional committee) that Liberalization Scheme (ETLS) is at the heart of the takes about 4–6 months. But many private sector FTA. Under the ETLS, preferential tariffs for intra- operators consider this process cumbersome, regional trade are set at 0 percent, and products resulting in a low number of registered products. should not face any quantitative restriction. Registration is needed for every individual product Although established in 1983, the ETLS was not a company intends to export under the scheme. launched until 1990 and re-affirmed as part of the Thus, 1,100 companies had registered only about ECOWAS Revised Treaty in 1993. In principle, it 3,200 products by 2006, 1,326 of which are from Nigeria and 800 from Ghana according to the Central Bank of Nigeria. A preferred trader system 4 ECOWAS member states generally agree that the UEMOA that allows faster border crossing for such external tariff will be adopted after a transition period and enterprises has also been agreed but has not been following some modifications — the most important of which is the inclusion of a 5th tariff band of 35 percent at the request of implemented. Nigeria. This 5th tariff band will supplement the four existing tariff bands for social goods (0 percent), raw materials and The ETLS also covers transit trade and establishes necessities (5 percent), intermediate products (10 percent), and an ECOWAS Inter-State Road Transit (ISRT) finished goods (20 percent). ECOWAS member states scheme to ensure goods in transit flow easily continue to disagree about which products should be classified without having to pay duties or other fees. A single under this high-duty tariff band, and countries continue to logbook and single bond are planned to aid in these apply similar, but distinct, tariff schedules. In addition, disagreement about (temporary) exemptions to the CET and transit flows. This initiative intends to standardize the critical issues of harmonizing product valuation procedures axle load limits, create a regional vehicle insurance persist; and there has been no discussion about other charges scheme, harmonize vehicle standards, and reduce levied at the border and the treatment of tariff exemptions. road blocks along major corridors. Another stumbling block concerns agreement on how to share the overall revenue that would be raised by the customs union. 3 | www.worldbank.org/afr/trade The protocols also establish the right of citizens duty-free importation of goods originating in with a valid travel document and health certificate ECOWAS, and applies a large number of to stay for up to 90 days in another ECOWAS additional taxes and fees that are not customs duties member state before being formally required to but that are charged on all imports. These include apply for residency. Such application should be the statistical fee, various processing fees, or the automatically granted. The revised ECOWAS export development levy. With the exception of the treaty of 1993 reaffirmed commitments made in VAT and National Health Insurance Levy, most of existing protocols, and stipulates that ECOWAS these are not applied to domestically produced citizens should be treated identically to national goods and therefore function as additional import citizens in establishing and running a business.5 duties. The WATH report also stresses that Ghana continues to apply (temporary) import bans and Commitments waiting to be implemented quotas for a few, mostly agricultural items. The report focusing on Nigeria, meanwhile (WATH However, our analysis shows that, after more than 2010c), outlines import bans and other quantitative two decades of implementation, these objectives restrictions, discriminatory non-tariff barriers, and have not been met. Even when a product is the incorrect treatment of transit goods as key registered and all information provided, crossing issues of non-conformity with ETLS protocols. the border can be difficult: additional payments always seem to be necessary, and the importation of While Ghanaian exporters complain mostly about products can be outright prohibited. Nigerian the difficulties in accessing the Nigerian goods customs does not distinguish between ECOWAS market, Nigerian traders have long criticized and global exporters when applying existing import discriminatory treatment when setting up trading bans. Thus, intra-regional trade is not duty or quota companies in Ghana, claiming that protocols free, and borders present substantial barriers to relating to the free movement of people and the regional integration. right of establishment are only partially implemented. There is a long-standing dispute These findings support a set of recent reports by about the activities of Nigerian traders in Ghana the West Africa Trade Hub assessing the degree to throughout the greater public and media. which existing regional commitments have been translated into national laws, and to what degree The Ghana Investment Act reserves a number of they are applied. These reports also find that the economic activities exclusively to Ghanaians — ETLS is only partially implemented in member including ―sale of anything whatsoever in a market, states, that trade costs remain high, and that petty trading, hawking or selling from a kiosk at any exporters pay customs duties even when they place,‖ taxi and car hire services, and barber shops. should be granted duty free treatment. However, the law stipulates that trading enterprises either wholly or partly owned by a non-Ghanaian, The Ghana-specific report of this series (WATH and involved only in the purchasing and selling of 2010b) shows that Ghana sometimes blocks the goods, can operate if they invest at least US$300,000 and employ at least ten Ghanaians.6 A 5 Cf. the supplementary protocol A/SP.2/5/90 on the similar investment threshold of only US$50,000 is ―Implementation of the third phase (right of establishment) of the protocol on free movement of persons, right of residence and establishment,‖ stating that ―[i]n matters of establishment 6 A new Ghana Investment Promotion Centre law is under and services, each Member State shall undertake to accord discussion, and would increase the investment threshold to non-discriminatory treatment to nationals and companies of US$ 1 million, though that revised law has not yet been other Member States.‖ enacted. 4 | www.worldbank.org/afr/trade set for other activities. The discriminatory nature of Even though the interviewed companies are aware these provisions seems to run counter to existing of the ETLS, only about half of them have ECOWAS treaties and protocols,7 and there have registered under the scheme, claiming that the been complaints that these provisions are applied ETLS is at best partially implemented, and that specifically to Nigerians and not to others. informal payments are still necessary to access the Nigerian market. They also contend that This issue has resurfaced repeatedly during the last registration requirements with Nigerian regulators four years, with news reports and Nigerian advocacy are discriminatory against non-Nigerian producers, groups, such as the Nigerian Union of Traders and import prohibitions in Nigeria are applied to Association, Ghana (NUTAG), reporting that exports from ECOWAS producers as well. While about 100 retail shops of Nigerian traders have these import restrictions are inconsistent with been closed during September 2010 following non- WTO commitments, they also violate the ETLS, compliance with the Investment Act. NUTAG which specifically determines that regional estimates that an estimated 1,000 businesses in exporters should not be subject to quantitative Ghana are affected. restrictions. A key complaint consistently voiced There have also been complaints that Nigerian throughout the interviews was the lack of official companies in other sectors face special challenges means to seek redress. in obtaining operating and construction licenses — The 30 manufacturing enterprises interviewed were but these claims are hard to verify. While the issues now, or had been, exporting to Nigeria by land and seems to have attracted less attention recently, had substantial export experience (of 9.5 years on tensions between Ghanaian and Nigerian traders average). Their operations covered a wide range of continue to simmer below the surface. manufacturing products, from garment and textiles to food and beverages, plastics, aluminum, Registering for the ETLS: A lengthy process pharmaceuticals, and other manufacturing Ghanaian and other exporters complain that products. More than 90 percent of the sampled market access to Nigeria is extremely difficult. A companies said they currently exported to Nigeria, recent World Bank (2009) study found that up to and nearly all of these also exported to other 15 percent of Nigeria’s imports enter the country countries in the sub-region. For about a third of the informally, largely along the Benin–Nigeria border, interviewed companies, exports made up a where Ghanaian products also enter. This policy significant part of their business, indicating that note offers more structured evidence of the more than 50 percent of their production was difficulties that Ghanaian exporters encounter exported. The average share of exports going to based on the experience of 30 Ghanaian Nigeria for all interviewed companies was 45 companies exporting to Nigeria. While these percent. companies only represent a small share of As mentioned, only 17 of the 30 large Ghanaian economic operators in Ghana, we believe that their exporters interviewed have registered and are using experience is typical of other operators as well. the ETLS. Of these, about 60 percent had received training on the ETLS, while of the companies that did not register for the ETLS, only 17 percent had received training, with another 17 percent indicating 7 ECOWAS protocols on the right of establishment allow the possibility for a member state to formally opt out for specific that the training they received had not been detailed activities; but it is not clear whether Ghana has formally done enough. Of the 14 companies who said they this for the retail sector. 5 | www.worldbank.org/afr/trade received training on ETLS, more than 70 percent Drug Administration Control (NAFDAC), and high claimed to have subsequently registered. costs of transit through Togo and Benin. According to the exporters, physical inspection at the border While subjective and based on our small sample, demands lengthy unloading and reloading of goods, these numbers indicate that training plays a positive which substantially increases costs and delays. role in companies registering for the ETLS. Disputes over official documentation requirements Meanwhile, in addition to inadequate knowledge of and the accuracy of presented documentation add the scheme, companies cited the ineffectiveness of to the delays, and without transparency about which its implementation and their small volume of documentation is needed, the potential for rent export within ECOWAS as reasons not to register. extraction increases. Thus, congestion is the norm, and aggravation the rule for Ghanaian exporters at Stuck at the border: Informal payments and Seme border, the entry point into Nigeria. delays While companies benefit to some degree from the ETLS, only a third of respondents indicated that border officials are fully implementing the ETLS. As a result, companies think that the benefits could be substantially larger if the ETLS was fully implemented. Of the 17 companies that claimed some benefits under the ETLS, more than 40 percent reported that they had not been granted duty free access to the Nigerian market before, and claimed that this was mostly because they had not paid bribes and other unofficial payments.8 Our interviews reveal that companies assume that More important, nearly a third of exporters goods cannot enter Nigeria without unofficial reported that their products had at times been payments to customs officers and other security prohibited from entering Nigeria. These officers, even if traders have all documentation, prohibitions were generally justified by official including registration documents under the ETLS.9 Nigerian import bans and covered products such as Bribery and corruption are the rule, and biscuits, ceramic pots, fruit juices, sachet alcoholic substantially impact cross-border trade — although drinks, wood works, and pharmaceutical products. the information obtained from interviews does not However, as pointed out earlier, the lack of allow us to estimate the value of these bribes or the national treatment as ECOWAS producers violates corresponding delays at road blocks and border the ECOWAS treaties and protocols, in addition to posts. being inconsistent with WTO treaties. It is striking, however, that only two of the In addition to paying customs duties, companies respondents stated they had never paid bribes when complained of lengthy inspection time and exporting to Nigeria, while the remaining claimed documentation requirements, delays and bribes at that paying bribes at borders was unavoidable, and borders, regulatory registration requirements in that they paid them either directly to or through Nigeria with the National Agency for Food and 9 A number of interviewees described the Nigeria customs 8 We observed that some exporters do not even know whether officers to say in their pidgin language ―Oga we no they chop they pay duties or not since usually no receipts are issued. papers ooo!!!!!‖ — meaning ―master we do not eat papers.‖ 6 | www.worldbank.org/afr/trade their transporters. Exporters who refused to bribe register every product type and need to pay a customs officials suffered significant delays, with separate registration fee for different sizes of the various excuses being offered, even if all same product. documentation was correct. We were told that exporters’ goods could be held up at the borders In addition to NAFDAC registration, products for more than three weeks. subject to other mandatory standards issued by the Standards Organization of Nigeria (SON) need to As long as these payments are required, regardless demonstrate compliance, and must follow a two- of whether a product is eligible to enter duty free, stage process. Product types have to be certified by the ETLS scheme will not stimulate regional trade. a SON office in the exporting country prior to At the same time, where documentation is importation into Nigeria, and will obtain a product incomplete, unofficial payments allow the trade certificate (valid for up to three years) if the transactions to proceed, preventing relevant exporter produces an acceptable test report. agencies from fulfilling their mandates. In a Subsequently, each shipment will have to be number of cases, Nigerian customs officials have certified as well. complained of fake certificates of origin for Ghanaian products, where products were simply Clearly, NAFDAC and SON registration and repackaged in Ghana to obtain duty-free access to certification present a daunting obstacle to the Nigerian market. Ghanaian manufacturers trying to export to the Nigerian market whose products require Challenges in product registration certification. Food products and drugs require certification Trouble in Transit: Additional costs in Togo under the National Agency for Food and Drug and Benin Administration Control (NAFDAC). However, gaining NAFDAC certification was named as an Three-quarters of our sample exporters claimed additional barrier to trade with Nigeria. they have to pay substantial charges to transit Certification is complex and burdensome, and through Togo and Benin as well as make large registration fees are excessive (EU 2010). Products unofficial payments in those countries before being need to be registered before landing in Nigeria, and allowed to pass. Some of the exporters include certification and registration require that a product them in the general transport allowances they pay to sample has to be imported into Nigeria. This in transporters. Informal payments at roadblocks add turn requires an additional import license prior to to these costs. Even language is used as a pretext to the importation of the sample. Products can then extract more informal payments. only be registered by a locally registered subsidiary company or a local partner, who needs to have the power of attorney from the producing company, which can create legal problems. In addition, registration fees are ten to fifteen times higher for imported as compared to locally manufactured products, and the registration needs to be renewed every five years, at 60 to 100 percent of original registration costs, according to NAFDAC’s website. The EU market access database (EU 2010) shows that companies have to 7 | www.worldbank.org/afr/trade The recent WATH (2010a) report refers to these the concerned parties either through ―direct payments, which seem to relate to vehicle agreement without prejudice to the provisions of inspection certificates (annually in Benin but per this Treaty and relevant Protocols,‖ or by a binding trip in Togo). In Togo, transporters also reported ruling of the Court of the Community. However, extensive delays in obtaining documentation at only member states or the Commission may refer a borders, having to pay escort fees, and the disregard matter to the court, which leaves no formal direct of the bond scheme, which left transporters dispute settlement mechanism accessible for private struggling to reclaim payments made under the sector operators.10 Likely as a result of the increased bond (WATH 2011a). The Benin-specific report monitoring activities undertaken under the (WATH 2011b) reports that the bond scheme is Borderless West Africa Program, a number of not functional in Benin either, and describes how West African countries have established complaint transit goods in Benin are subject to accumulated hotlines for drivers to report road harassment. taxes of more than 6 percent as well as a customs There is no data on the use of these new hotlines, escort fee of more than US$100 per truck, even but because they link directly to national law where container seals are correctly applied. These enforcement agencies, use is likely affected by practices at Togo and Benin borders contravene already existing prejudices against these agencies. WTO treaties as well as the ETLS protocol that provides for free movement of goods, services, and Since 2007, ministries in Ghana and Nigeria have persons. Under the ETLS provisions, transit trade been meeting to address bilateral trade issues, with should be governed by one single log-book and one Nigeria focusing on the treatment of Nigerian bond. traders living in Ghana, and Ghana concerned with the difficulties her goods exporters face. The two Making the ETLS operational countries have now drafted a bilateral Trade and Investment Agreement stating that both countries Making the ETLS functional will be the first step to ―agree to fully implement the ECOWAS protocol achieving a functional ECOWAS-wide FTA, which on the Free Movement of Goods and Services, will allow companies in ECOWAS to benefit from otherwise referred to as chapter VII of the revised larger markets, increase specialization, and integrate ECOWAS Treaty of 1993,‖ to facilitate the free into regional supply chains. This then will foster flow of trade between the countries, while growth, create employment, and increase complying with the rules of origin as defined in the productivity as a first step to competing more ECOWAS protocols. The agreement also states successfully in global markets. To ensure credibility that both parties will make special provisions in it will be important to demonstrate that the FTA their investment laws for ECOWAS nationals. It can be implemented effectively before applying the foresees the establishment of a Joint Standing yet to be agreed upon Common External Tariff and Committee, the harmonization of regulatory achieving a customs union. procedures, and the inclusion of special investment provisions. The agreement also reiterates the right Despite the challenges for companies, exporting to Nigeria is profitable and offers the potential for 10 Only in the case of human rights violations does the court export growth. Our findings concur with recent have jurisdiction to rule on cases submitted by individual research by the West Africa Trade Hub, which ECOWAS citizens. ECOWAS member states gave this concludes that ETLS is not well implemented, one specific mandate to the court in 2005. However, there do not key reason being the lack of political will among seem to be any cases testing the widths of this mandate and if, for example, complaints brought forward by an individual governments. The revised ECOWAS treaty of regarding humiliation at a border post would be accepted by 1993 provides for the settlement of disputes among the court. 8 | www.worldbank.org/afr/trade of citizens with a valid travel document and health impartial mechanisms for seeking redress and certificate to stay up to 90 days in another settling disputes could bring more compliance with ECOWAS member state. In principle, all of these existing laws and commitments. provisions are not new, but existing commitments at the ECOWAS level. With this, there must be a simplifying of trading procedures at the border, registration requirements The Federal Economic Council in Nigeria has for products to meet national standards and, ―approved the signing‖ of the agreement, although especially, registration under the ETLS. This the agreement has not yet been signed. As the process would mean reviewing existing laws and agreement reiterates commitments made under the taxes and increasing collaboration between ECOWAS treaties, its real value lies in the renewed standards and other agencies over the medium effort to implement existing commitments. It term. In addition, a mechanism should be created should support, rather than conflict with, the to monitor increases in transparency, reductions in ongoing integration processes and could function as arbitrary behavior, and the degree of the a catalyst to broader implementation also by other simplification of procedures. member states. The agreement prescribes the use of ―diplomatic channels‖ for the settlement of Both countries should be eager to address the disputes under this agreement. remaining barriers in goods trade to allow their companies more access to important regional Customs clearance in Ghana has recently improved markets. And by addressing the barriers that substantially, with the private company GCnet Ghanaian goods exporters face in Nigeria the managing the electronic processing of trade and political environment will be more ready to address customs documents and facilitating transit trade to the situation of Nigerian traders in Ghana. landlocked countries through Ghana. While there has already been some collaboration between To begin increasing transparency, both NAFDAC, the Food and Drugs Board (FDB), and governments could publish an easily accessible the Ghana Standards Board (GSB) to facilitate overview of current procedures and official fees and trade in locally produced goods, it is not clear what charges levied at borders — and keep this if any tangible results have been achieved in information current. It should include the harmonizing standards or ensuring mutual publication of other regulatory requirements, such recognition of test results, conformity assessment, as registration requirements for products in Ghana and standards. and Nigeria, including the documents needed at the border. The relevant standards agencies should Recommendations then post this information on the internet. Given the economic and political importance of For wider sharing of this information, the Ghana Ghana and Nigeria in West Africa, addressing the Export Promotion Council could intensify its identified issues will be crucial. Successful reforms training activities for the private sector, aiming for here will likely be a catalyst for deeper integration smaller companies and getting involved in regional within and across the region. or bilateral business summits. More transparency would create an environment in which economic To strengthen trade between Ghana and Nigeria, operators know their rights and obligations, and existing commitments should be fully implemented would increase their confidence to seek redress.11 and laws will have to be applied. And transparency and better complaint mechanisms will have to be at the heart of any initiative. Thus, more access to 11 Recently established Border Information Centers at Aflao (Ghana) and Kodjoviakopé (Togo) already help increase 9 | www.worldbank.org/afr/trade With this, the respective Ministries of Trade and While encouraging behavioral change through Finance could review existing procedures and training and increased professionalization is likely assess compliance with commitments already made to be a long-term project, the initial focus should be under ECOWAS, especially if the results of this on strengthening mechanisms already established assessment were made public. Such reviews would for harassment cases. This will be essential to not only build transparency but could bring about ensure compliance with laws and induce behavioral the removal of (temporary) barriers in Ghana and change by shifting the balance of power towards the imports bans in Nigeria, as well as the consistent users of trade infrastructure. Keeping plaintiffs application of already existing procedures. anonymous could help increase the uptake of the system as economic operators often resist using The drive for transparency should be such channels for fear of even more repression by complemented by initiatives to simplify procedures border agents. and documentation requirements at borders — that is, reduce the number of agencies present, The mechanisms could also be expanded to take strengthen collaboration and delegation among up complaints by users in cases where border these agencies, and review and possibly consolidate officials apply procedures incorrectly without the number of taxes and fees payable at the border. necessarily demanding informal payments. This This would reduce the number of interactions kind of mechanism could initially be run as a pilot between traders and officials and help reduce the at Aflao and Seme borders before being expanded costs and time needed to cross borders. A long- to other border posts. Again, high-level political term objective of such initiatives would be to create commitment will be needed to ensure that a single window mechanism and single point of individual complaints are followed up, thereby payment for trade transactions, which would help slowly generating confidence in the system and reduce the possibility of extracting illegal payments. leading to a virtuous circle. For this to succeed, there would have to be Beyond national initiatives, member states could substantial high-level political support, and all press for establishing an ECOWAS-wide enquiry agencies present at the border would have to be point, possibly as part of the Court of Justice, that involved. The Ghana Immigration Service and the would serve as an official point for seeking redress Ghana Revenue Authority in Ghana, and the where ECOWAS treaties dealing with the free Nigeria Immigration Service, the Nigeria Customs movement of goods, people, and transport are not Service in Nigeria, and the Nigeria Task Force on applied. Trade Facilitation could take leadership of the initiatives. Measurable indicators will have to be developed to assess how successful the reforms and initiatives are Two additional issues will have to be addressed. in helping trade between the two countries. For Governments need to launch initiatives to (a) example, the number of interactions with encourage behavioral change — especially that of government officials or the average time when border officials — to address corruption and crossing the border in either direction could be informal payments; and (b) establish functioning, monitored. Or, collecting anonymous data on the impartial mechanisms for seeking redress and amount of formal and informal payments that settling disputes since current ones seem lacking. traders pay when crossing the border could be used to establish trends in border management. Finally, statistics on the number of complaints filed and transparency — but publishing official information by border agencies would further support this initiative. verdicts issued would help monitor improvements 10 | www.worldbank.org/afr/trade in the balance of power between government available at SSRN: officials and traders. http://ssrn.com/abstract=1327569. Along with these largely procedural reforms, both DRC. 2007. Global Migrant Origin Database, governments will have to follow up on the http://www.migrationdrc.org/research/ proposed procedural and legal reviews and work typesofmigration/global_migrant_origin_database.ht towards bringing their trade, investment, and other ml policies — and their application — into compliance with existing ECOWAS commitments. Trade Goretti, Manuela, and Hans Weisfeld. 2008. between Ghana and Nigeria will also benefit by "Trade in the WAEMU: Developments and deepening the collaboration between NAFDAC, Reform Opportunities." IMF Working Paper SON, GSB, and FDB. This includes gaining WP/08/68. mutual recognition of standards and certificates of Hoppe, Mombert, and Nihal Pitigala. 2011. "The conformity and reducing costs and simplifying Impact of Multiple-Taxation on Competitiveness in registration procedures. All initiatives should be Nigeria." Africa Trade Policy Note No.16. structured to ensure coherence with existing Washington, DC: The World Bank. commitments and should be open to other interested standards bodies in the region. Transit- Migration in Ghana, a Country Profile. 2009. related payments in Togo and Benin should be International Organization for Migration: Geneva. addressed in a corridor approach, for example, as part of the Abidjan-Lagos corridor initiative West African Trade Hub. 2010a. "ECOWAS supported by the World Bank. Market Integration: Results of A Preliminary Gap Analysis." West African Trade Hub Technical About the Authors Report No. 33. Mombert Hoppe is an Economist in the Poverty West African Trade Hub. 2010b. "Ghana: A Gap Reduction and Economic Development Analysis of ECOWAS Market Integration." West Department of the World Bank. Francis Aidoo is African Trade Hub Technical Report No. 36. an independent consultant based in Accra. This work is funded by the Multi-Donor Trust Fund for West African Trade Hub. 2010c. "Nigeria: A Gap Trade and Development supported by the Analysis of ECOWAS Market Integration." West governments of the United Kingdom, Finland, African Trade Hub Technical Report No. 37. Sweden and Norway. The views expressed in this West African Trade Hub. 2011a. "Togo: A Gap paper reflect solely those of the authors and not Analysis of ECOWAS Market Integration." West necessarily the views of the funders, the World African Trade Hub Technical Report No. 44. Bank Group or its Executive Directors. West African Trade Hub. 2011b. "Benin: A Gap References Analysis of ECOWAS Market Integration." West African Trade Hub Technical Report No. 45. European Union. 2010. Market access database, accessed at madb.europa.eu on November 25, World Bank. 2009. "Nigeria: Employment and 2011. Growth Study." Report No. 51564-NG Adam, Anokye, and George Tweneboah. 2008. "The Changing Trade Pattern of Emerging Economies: Gravity Model of Ghana’s Trade Flow 11 | www.worldbank.org/afr/trade