INTERNATIONAL TRADE FACILITATION: WEST AFRICA AND AFRICA ECONOMY PERSPECTIVE

INTERNATIONAL TRADE LAW PAPER ADEOLU SUNDAY

INTERNATIONAL TRADE FACILITATION: WEST AFRICA AND AFRICA

ECONOMY PERSPECTIVE

BY

ADEOLU SUNDAY ([email protected])

I. INTRODUCTION

II. THE WEST AFRICA ECONOMY

III. BARRIERS TO TRADE FACILITATION IN WEST AFRICA COUNTRIES:

a. NIGERIA

b. OTHER WEST AFRICA SCENARIOS

IV. REGIONAL FREE TRADE AREAS (FTAS) AND CONTINENTAL FREE TRADE

AREA (CFTA)

V. CONCLUSION

I. INTRODUCTION

Trade facilitation is integral to economy growth of any country. It is described as a reduction

in trade costs.1 The reduction in trade costs could be among the entities that make up a nation or

between one nation and the other. The distinction between international trade facilitation and

domestic trade facilitation readily comes in. In this context, domestic trade facilitation will

1 Patricia Sourdin and Richard Pomfret, Trade Facilitation, - defining, measuring, explaining and reducing

the cost of international trade – p. 3, Edward Elgar Publishing Limited, 2012.

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ensure a system where movement of goods and services within a particularly country is not

hampered by factors such as transport costs, infrastructure decadence or dearth, conducive

environment and other market regulatory rules applicable to trade facilitation within the country.

International trade facilitation is broader than what constitutes a working definition of domestic

trade facilitation. In most instances, when there is a discussion about trade facilitation, it is

believed that the trade facilitation that is mentioned is international. This is evidenced by the

definition used by the Asia-Pacific Economic Cooperation (APEC) and the International

Chamber of Commerce (ICC) which focus on processes and procedures at the border, issues

related to preparation of customs and trade documents, customs clearance procedures, border

control and release.2 The United Nations Centre for Trade facilitation and Electronic Business

(UN/CETFEB) defined trade facilitation as: “the simplification, standardization and

harmonization of procedures and associated information flows required to move goods from

seller to buyer and to make payment” (OECD 2001)

2 The APEC Second Trade Facilitation Action Plan in 2008 defined trade facilitation as follows: “The

simplification and rationalization of customs and other administrative procedures that hinder, delay or

increase the cost of moving goods across international borders”. See http://www.apec.org/Groups/-

/media/Files/Group/CTI/07_2ndTFAP_fnl.ashx. The paper presented by the ICC Commission on

Customs and Trade Regulation in 2007 on International Trade Facilitation Agreement as an outcome of

the Doha Development Round included this statement: “ICC has long advocated a trade facilitation

agreement with mutually-agreed rules for trade procedures that will improve the efficiency of managing

the movement of goods across national borders”. See

http://www.iccwbo.org/policy/customs/id16114/index.html.

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Before the Agreement on Trade Facilitation came into existence, there was no separate

agreement on trade facilitation. The only vestiges of trade facilitation were the provisions of

World Trade Organization (WTO) General Agreement on Trade and Tariff (GATT) 1994.3

Work on trade facilitation at WTO began with the mandate given at the Singapore Ministerial

Declaration in 1996.4 The mandate directed the Council for Trade in Goods (CTG) to examine

and do a detailed work on how to streamline trade procedures in order to assess the scope of

WTO rules in this area.5 The WTO members led discussions from 1996 to 2001 in the CTG in

order to establish the need and scope for WTO rules on trade facilitation. The discussion

centered on issues relating to import and export procedures. It also included customs procedures,

physical movements of consignments – which is transport and transit -, insurance, payment and

other financial requirements such as electronic facilities and the need for assistance and

cooperation.6 The CTG discussions were significant for two reasons. The members reviewed the

regulatory frame work that was in existent on trade facilitation outside and inside the WTO.7 It

was this discussion that later on established that a new regulatory framework for trade facilitation

was necessary. The GATT provisions that apply to trade facilitation were considered to be too

generalized than to be of specific use for trade facilitation. The other significant reason is that

members were able to define the scope of trade facilitation through the CTG. The definition was

3 Article V of GATT provides for freedom of transit of goods from one contracting state to another

contracting state. Article VIII of the same GATT provides for fees and formalities connected with

importation and exportation. Article X of GATT provides for publication and administration of trade

regulations.

4 See History of the Negotiations, 1 tfig.unece.org/contents/Scope-of-TF-at-WTO.html.

5 Id.

6 Id.

7 Id.

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to focus on the simplification of import or export procedures, document and data requirements,

transparency, and cooperation among government agencies and customs.8

There were other issues at the discussion but they were considered to be related to the

General Agreement on Trade in Services (GATS).9 These issues were to be taken up on further

negotiations on service sector liberalization of the GATS.10

The work undertaken by the CTG led to a proposal that started negotiation of the new legal

framework for trade facilitation at the WTO.11

This was as a result of the clarifications and the

review of the three GATT articles. The proposal was subsequently included in the Doha

Ministerial Declaration.12

However, negotiations on the Doha Round which included the special

and new topic on trade facilitation were substantially delayed for good three years.13

Consequent to the official launch of the Doha Round in 2011, negotiations were delayed by

more than two years. This was because the WTO had to struggle to get consent on the detailed

work program and modalities for the negotiation.14

Significant to the inability to obtain a

consensual agreement on time over the Doha Round was the opposition from the developing

countries which delayed negotiations on the new Singapore issues.15

This opposition to trade

8 Id.

9 The issues include: availability of transport and banking services, payment and financial flows.

10 Supra, note 8.

11 Id.

12 See Section 27 of the World Trade Organization Ministerial Declaration, 20 November, 2001,

WT/MIN(01)7DEC/1.

13 Supra, note 11.

14 Id.

15 Id.

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facilitation was later dropped by the developing countries. Negotiations were subsequently

launched upon this Singapore issues.16

Trade facilitation considers how procedures and measures governing the movement of goods

across national borders can be improved to reduce associated costs burden and maximize

efficiency while it preserves legitimate regulatory control.17

Trade has been noted as a powerful engine that can accelerate economic growth, create many

jobs, and reduce poverty to its barest minimum.18

Notable is the fact that one of the barriers to

trade facilitation is the high cost in transport of goods from one border to another which may

sometimes affect trade facilitation.19

The Agreement on Trade Facilitation (ATF) itself came into existence in December 2013 out

of the ninth session of the Ministerial Conference in Bali.20

The ATF spells out modalities for

improving trade facilitation. This is broader than what used to obtain under the relevant

provisions of the GATT Agreement. Thus, there is a new regime for trade facilitation in the

world. When the ATF comes into force, it is believed that trade facilitation across the world will

be more efficient and effective and as a result, it will impact positively on the world economy.

16

Id. Note that the General Council decision of August 2, 2004 marked the launch of this negotiations.

See World Trade Organization, Doha Work Program. Decision adopted by the General Council on

August 1st, 2004, and August 2

nd, 2004 (WT/L/579).

17 En.wikipedia.org/wiki.Trade_facilitation.

18 See John S. Wilson, Trade Facilitation and Economic Development available at

siteresources.worldbank.org/INTTRADERESEARCH/RESOURCES/544824-

1320091873839/WorldTradeBrief05_JohnWilson.pdf.

19 Id.

20 See the Agreement on Trade Facilitation, WT/MIN(13)/W/8. World Trade Organization.

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Special in the provisions of the ATF is the dedicated provisions for least developed countries

members and developing countries members of which Africa, as a continent, comes into play.

The ATF is expected to be a great catalyst in boosting Africa economy and at the same time

encourage trade facilitation at a greater length among the Africa countries.

The bulk of barriers to trade facilitation are inherent in the importation and exportation

procedures, costs of duties and taxes of any level that may be imposed on importation and

exportation or in connection with them. The rules of valuation of products as published by the

responsible regulatory agency of such state member, laws, regulations, and appeal procedures of

that state member to mention but a few.

Part II of this paper specifically examines the West Africa Economy and other regional

efforts that have been made over the years to ensure that trade facilitation is improved in West

Africa. The necessary consequence of trade facilitation, which is economic development is also

examined.

Part III specifically looks at barriers to trade facilitation in West Africa with Nigeria, and

other scenarios as focal examples. Part IV considers Free Trade Areas and Continental Free

Trade Area (CFTA) in West Africa and Africa in general. Part V concludes and makes further

suggestions on how to achieve the best result out of the ATF in Africa and West Africa Region.

II. THE WEST AFRICA ECONOMY

One of the importance of trade facilitation lies in the economic growth gains that could

be derived from it. This is evidenced by numerous agreements that have been signed by African

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countries at bilateral, sub-regional and regional levels – such as ECOWAS, and Africa Union

(AU) - and other efforts that have been made at country levels as well.21

At the regional level of West Africa, there is ECOWAS founded in 1975 to facilitate

economy integration of the region in all areas such as technology, transport, telecommunications,

energy, agriculture, natural resources, commerce, monetary and financial questions and social

and cultural matters, to mention but a few.22

The establishment of ECOWAS also seeks to

eliminate among member states any customs duties any other charges that will have equivalent

effect on import and exports.23

ECOWAS also aims to eliminate restriction in trades among the

member states and eliminates obstacles that will serve as restrictions to free movement of

persons, services and capital among the member states.24

Notable and much more relevant to

trade facilitation among ECOWAS institutional bodies is the ECOWAS Bank for Investment and

Development.25

In an attempt to ensure that trade is smoothly facilitated in the West Africa region, the

member states to the regional body have proposed a unified currency in the region and as well as

cancellation of border restrictions in moving goods across the member states of ECOWAS. The

ECOWAS single currency is scheduled to take off in 2020.26

21

See Trade Facilitation to Integrate Africa into the World Economy available at

www.uneca.org/sites/default/files/publications/atpc-wp4.pdf .

22 www.comm.ecowas.int/sec/index.php?id=about_a&

23 See Bamba, ECOWAS Regional Integration: Position of Common Investment Market, at 11, available

at www.privatesector.ecowas.int/III/ECOWAS.pdf.

24 Id.

25 Id.

26 www.africamanager.com/site_eng/detail_article.php?art_id=13398.

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One of the advantages of the economic integration of the ECOWAS region will certainly

be preferential trade arrangement. This is on the front burner of the regional body. Economic

integration in the ECOWAS region will lower any possible barriers that may exist among the

participating member states of the region.27

The consequence of this is that any non-member

states of ECOWAS will have no option than to face a high threshold regime of barriers to trade.28

The illustration above is somewhat reflected in the ATF which came into existence in

2013.29

Because the ECOWAS member states share borders together, it will be relatively easy

for them to promote trade facilitation among the member states. One report opined that most

trades done in Africa are with the developed world. Only in few instances that an Africa country

trades with another Africa country.30

The Africa Union has noted that only about 10-12 percent

of African trade circulates among Africa countries.31

The Economic Commission for Africa‟s

Assessing Regional Integration in Africa IV has opined that the levels of intra-Africa trade may

be less than would be forecast by a gravity model.32

Should this be the case, it has been noted

27

Supra, note 23, at 5.

28 Id.

29 Agreement on Trade Facilitation, (Draft Ministerial Decision), article 8 (Border Agency Cooperation)

provides as follows: 2. Members shall to the extent possible and practicable, cooperate on mutually

agreed terms with other Members with whom they share a common border with a view to coordinating

procedures at border crossings to facilitate cross-border trade. Such cooperation and coordination may

include: (i) alignment of working days and hours; (ii) alignment of procedures and formalities; (iii)

development and sharing of common facilities; (iv) joint controls; and (v) establishment of one stop

border post control.

30 See Boosting Intra-Regional Trade in Africa: An end in Itself? at 1, available at

ictsd.org/i/news/bridges-africa-review/134375/.

31 Id.

32 Id.

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that the seeming implications will be that there are some other factors aside the small size of

Africa economies that are limiting intra-regional trade in Africa.33

In the 2014 economic report on Africa, it was noted that intra-Africa trade rose from

$67.7 billion in 2011 to $73.7 billion in 2012.34

In 2012, the share of intra-Africa trade was said

to account for 11.5 percent of Africa‟s total trade.35

In my opinion, this seems to be very low

compared to what is obtainable in other regions of the world as shown below. Credence is lent to

this statement by the fact that between 1996 and 2011, Africa‟s trade with the rest of the world

grew higher than intra-Africa trade. This was at the rate of 12.0 percent to 8.2 percent

respectively.36

Compared to the above figure, about 40 percent of the North America trade and 63

percent of the Western European trade circulates within the region.37

The above typically

suggests that there is a need in the level of intra-trade among the Africa countries. The

ECOWAS which is a regional body with a bias for economic integration has a potential to boost

intra-trade among the member states. Part of the current program of ECOWAS is to ensure that

there will be no any tariff or any other barriers on member states. It is also expected that there

shall be a common external tariff (CET) on the rest of the world by customs members.38

33

Id.

34 See United Nations Economic Commission for Africa, Dynamic Industrial Policy in Africa, at 16,

available at

http://repository.uneca.org/unecawebsite/sites/default/files/page_attachments/final_era2014_march25_en.

pdf 35

Id. 36

Id. 37

Supra, note 33.

38 Supra, note 26.

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As noted above, the possible reasons that could account for low percentage of intra-trade

among Africa countries rather than what obtains in West Europe and North America could be

based on many factors. One of such clear factors could be different customs procedures

applicable in different Africa countries. In a 2004 report39

, it was revealing that there are

significant delays at African customs compared to the rest of the world. It was depicted by this

report that it took 12 days in the south of Sahara Africa countries before goods could be cleared

at the customs compared to 7 days obtainable in the Latin America, and 5.5 days in the Central

and East Asia.40

This could add additional significant costs for importers whom their goods have

been delayed at customs warehouse.

The delay at the customs warehouses across the Africa region which costs additional

significant cost could be one of the factors that accounts for low intra-trade in Africa, which has

a chain effect on the amount of intra-trade in West Africa. In a current report, there has been

improvement in Africa customs procedures. This may have been geared by the several efforts on

trade facilitation across the world and the Bali Ministerial conference of the WTO.

Currently, in Ghana, a part of the ECOWAS member state, it takes about 5 days to clear

goods that are coming into their country.41

In Nigeria, part of the ECOWAS member state and a

country that is considered as one of the economic giants in Africa and the largest economic

market in Africa, there has been a tremendous improvement from what used to obtain in 2004.

39

See Africa Trade Policy Centre, supra, note 21 at 27.

40 Id.

41 Id. Note that the source of this information is Economic Community for Africa computation from

official sources.

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The number of days for clearance of goods in 2004 in Nigeria was 18 days42

. This has now been

reduced to 2 days.43

In another perspective, a higher volume of extra-trade from Africa to European and North

America countries may be due to much value attached to US Dollar and European Pound

Sterling. It may be the belief that there will be much gain when this currency is changed to any

of Africa country‟s currency given the fact that there is no country in Africa that her currency

can match with that of USA or other European country. Notwithstanding this, the level of

infrastructural development in developed countries which engenders easy movement of goods

from one place to another until its final point may be another possible factor that encourages the

preferred trade from Africa countries with North America and West European countries.

It has been noted that the economic performance of West Africa largely depends on the

economic conditions of developed countries. This is notwithstanding certain modification of

trade flows geared towards developed emerging countries.44

Given that there is progression in

trade with the developed countries, the ECOWAS region still has 50.7% of its exports to the

United States and the European region.45

This seems to be a great dependency on the part of

Africa. However, it is also a veritable avenue for trade facilitation into West Africa countries

which has the potential of boosting the West Africa countries economy.

42

Id.

43 http://www.globalsouthgroup.com/wp-content/uploads/2013/08/download0b30.pdf

44 See Inclusive Green Growth to Accelerate Socio-Economic Development in West Africa, Economic

and Social Situation in West Africa in 2011-2012, and Outlook for 2013, March 2013 at 18 available at

www.uneca.or/sites/default/files/uploaded-

documents/ice2013/WA/16th/16_ice_economic_social_report.pdf.

45 Id.

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The Economic Partnership Agreement (EPA) was negotiated with Africa Union (AU) -

note that ECOWAS member states are all members of Africa Union. The EPA is a binding

bilateral contract between the European Union and individual Africa countries.46

The EPA

agreement is expected to be signed by October 1st, 2014.

47 If this agreement is signed, it is

expected that within a decade of it being signed, up to 80 percent of the African countries market

will be opened to European goods and services. This may have a good potential for development

of Africa economy.

However, there has been a different trend to this recently. At the meeting of all African

Ministers of Trade and experts in trade held in Addis Ababa, Ethiopia on April, 29th

, 2014, led

by Nigeria, Africa countries have agreed to reconsider their positions on the EPA.48

It is believed

that the EPA will have a long term negative effect on Africa‟s efforts towards industrialization

and job creation.49

Nigeria canvassed the position, which all other Africa country representatives

unanimously agreed to, that before the EPA is signed, there should be a robust economic analysis

of the overall impact that the agreement will have on Africa as a region, the African youths and

46

See Stephen McDonald et al, Why Economic Partnership Agreements Undermine Africa‟s Regional

Integration, at I, available at www.wilsoncenter.org/sites/default/files/EPA%20Article.pdf.

47 See African Leaders Join Nigeria to Reject European Economic Agreement, available at

www.thisdaylive.com/articles/african-leaders-join-nigeria-to-reject-european-economic-

agreement/177403/, published on April 30, 2014 visited on (May 8, 2014 at 8:22PM).

48 Id.

49 Id. The Africa Union (AU) in 2007 noted that the reciprocal trade under EPA will have a heavy cut on

intra-Africa trade. Except African countries extend the same tariff reductions or elimination, as the case

may be, under the EPA to their regional neighbours, there is a tendency that imports from Europe will

have a negative impact on intra-Africa trade as well as the attempt towards Africa economic integration.

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the future generation.50

It was noted that Africa countries should work towards job creation and

intra-Africa trade “through value addition of their raw material, especially in the areas where

they have competitive and comparative advantage”.51

It is to be noted that withdrawal from signing the EPA agreement with the EU might have

a potential adverse effect on the West Africa economy and the whole of Africa economy in

general.

III. BARRIERS TO TRADE FACILITATION IN WEST AFRICA COUNTRIES

Trading with a developed country such as United States of America or Canada may be

easier than trading with one of the countries from Africa region or with a developing country

from anywhere in the world. This stems from the fact that there are differences in development

and economic powers of such countries. The differences in development may account for why

there are more barriers to international trade facilitation among some countries.

It has been noted that the growing importance of trade facilitation nowadays did not

emanate from the reduction of other barriers to trade, especially tariff, but more importantly from

changes in international trade interactions which is the consequence of globalization and the

survival of global value chains in the last twenty years.52

It is no doubt that there has been a

significant worldwide reduction in transport costs. There has also been an increased use of

information and communication technologies, which is necessary for smooth, effective and

worldwide trade facilitation, especially, in developing countries of Africa. However, this part

50

Id.

51 Id.

52 See United Nations Economic Commission for Africa, Trade Facilitation from an African Perspective,

at 17, available at www.uneca.or/sites/default/files/publications/trade_facilitation_en.pdf.

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shall specifically look at barriers to trade facilitation in Nigeria, West Africa and the recent

development of activities relating to trade facilitation which are in tandem with the ATF.

III.a. NIGERIA

In Nigeria, one of the major economies in West Africa and ECOWAS member state,

there seems that there is a gradual implementation of the provisions of the ATF that is yet to

come into force. The paper presented recently by Comptroller of Customs services in Nigeria at a

symposium in Nairobi, Kenya, lends credence to this.53

Article 1.1 of the ATF makes provisions

for publication and availability of information by each member state with respect to trade

facilitation. The reason for this is to enable governments, traders, and other interested parties to

become acquitted with those information as may be published from time to time. The provision

of this article further provides that the publication of the information shall be in a non-

discriminatory and easily accessible manner.54

The Nigeria Customs Service (NCS) maintains an active website55

which provides

information on importation, exportation, transit procedures, and other important information that

will guide parties, traders and governments that may be intending to transact international

53

See Paper Presented by Taju Olanrewaju, Best Practices in Trade Facilitation: Nigeria Customs Service

Experience – Symposium on WTO Trade Facilitation for African Countries, Nairobi, Kenya, November

13-15, 2012 available at

http://www.wto.or/english/tratop_e/tradfa_e/case_studies_e/symp_nov12_e/session5_taju_e.ppt (last

visited on May 9, 2014, 2:03 PM).

54 See Agreement on Trade Facilitation, 2013, article 1(1), paragraph 1.1 provides: “ Each Member shall

promptly publish the following information in an non-discriminatory and easily accessible manner in

order to enable governments, traders and other interested parties to become acquainted with them: ….

55The Nigeria Customs Service at http://www.customs.ov.ng.

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business trade with Nigeria.56

Notably is the fact that this information on the NCS website has

been maintained on the website since year 2008.57

This is a pointer to the fact that Nigeria has

been making concerted efforts to comply with the article in discussion before the final draft of

the ATF came into existence in 2013. However, there may still be one or more areas in which

substantial compliance with the provisions of this article may be needed. For example, there is

nothing on the NCS website that suggests any published information on appeal procedures

mechanisms as provided for in the article 1(1) 1.1. of the article.

In a 2014 presentation of the Comptroller General of Nigeria Customs Service58

, there

appears that there has been an improvement to what obtained in 2012 with respect to compliance

with the provisions of the ATF. Article 10(4), 4.1. of the ATF stipulates that “members shall

endeavour to establish or ‘maintain a single window’, enabling traders to submit documentation

and data requirements for importation, exportation or transit of goods through a „single entry

point‟ to the participating authorities or agencies. . . .”59

The Automated System for Customs

Data (ASYCUDA) seems to be what is being used for the single window customs operations to

facilitate either intra-trade among West Africa countries or trade with international

communities.60

In this regard, NCS has provided a platform under which traders, stakeholders

56

Supra, note 49.

57 Id.

58 See a paper presented by Comptroller Abubakar B., on Trade Facilitation Through Effective Port

Operations in Nigeria on March 25, 2014 at the Lagos State Chamber of Commerce and Industry

available at

http://www.lagoschamber.com/download/Downloads/TRADE%20FAcILITATION%20BY%20CUSTO

MS%202014.pdf. (Last visited on May 9, 2014, 4:30 PM).

59 See Agreement on Trade Facilitation, supra, Article 10(4) 4.1.

60 Note that the ASYCUDA has different versions.

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and regulatory agencies in Nigeria submit their documents and interact with other participating

agencies or authorities from the same point. This will eliminate unnecessary longer days in

clearing goods at the border and significantly reduce the numbers of days for clearing goods at

the border.

As noted above, it is no surprise that goods are cleared at the relevant port in Nigeria now

within 48 hours – which is two days. This is a part of the recent achievements of the NCS and it

is commendable.61

Additionally, the NCS has also endeavored to modernize risk management

practices by the use of different lanes in clearing consignments. This is illustrated by five

different types of lanes62

. There is the Green Lane. What this means is that when consignment is

at the Green Lane, it indicates that such consignment has been cleared and released.63

Significantly, this reduces unnecessary human contact with the consignment which has the

potential of causing significant delay. The Blue Lane signifies that the consignment on the Blue

Lane is cleared and released. However, the consignment may need post audit clearance.64

With respect to the Red Lane, then it will suggest that the consignment on that lane needs

x-ray examination. The fact that a consignment needs to be examined on the Red Lane is not

61

See a paper presented titled “The Role of Nigeria Customs Service in Trade Facilitation Including

Practical Challenges on Procedure and Documentation under Destination

Inspection/ASYCUDA++Achievements and Way Forward, available at

http://www.nigeriaexporter.org/downloads/NITPRO%20%NCS%20PAPER.pdf. (last visited, May 9,

5:09 PM).

62 Supra, note 58, at 4.

63 Id.

64 Id.

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sufficient to conclude that it cannot be directed to the Green Lane.65

Depending on the outcome

of the examination, consignment may be routed to either the Green Lane or the Deep Red Lane.

The Deep Red Lane signifies that the consignment requires physical examination. Finally, there

is the Yellow Lane. When consignment is on the Yellow Lane, it indicates that the consignment

document needs to be checked at the Custom Processing Centre (CPC). Therefore, depending on

the outcome of the findings, the consignment may be directed to the Green Lane or Red Lane. As

noted above, if the consignment is routed to the Green Lane, it will indicate that there is no any

other outstanding issue that could delay the consignment at the port.66

III.b. OTHER WEST AFRICA SCENARIOS

It seems that another barrier to trade facilitation in West Africa may be eliminated when

there is border agency cooperation among the several member states of ECOWAS. The

importance of border agency cooperation stems out from the fact that member states of

ECOWAS can coordinate procedures at the border crossings which will facilitate cross border

trade.67

Though the new ATF provides for this border agency facilitation, there have been

efforts towards this border agency cooperation by the Africa Regional Bodies such as ECOWAS

in West Africa, South Africa Development Community (SADC) in the Southern part of Africa,

and many others in Africa before the text of ATF came into existence. In West Africa region for

example, border cooperation arrangement has been ongoing for a while through the avenue of

regional integration under the auspices of ECOWAS.

65

Id.

66 Id.

67 Id.

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It will be helpful to note that the ATF indicates that the cooperation and coordination

may include alignment of working days and hours among members, inter alia, with whom they

share a common border.68

With respect to the concept of One Stop Border Post (OSBP), it has

been noted that this concept has been tested in West Africa.69

The West Africa Economic and

Monetary Union (UEMOA) indeed took the fore front position in this area in establishing

OSPBs.70

The ECOWAS as a regional body is now completely involved in the establishment of

OSPB.71

The first two joint border posts were to be developed from the internal resources of

ECOWAS.72

Aside the ECOWAS member states, it seems that the whole of Africa countries are well

aware of the requirements for effective and efficient well coordinated border management. The

5th Ordinary Meeting of all the Directors General of Customs on the continent of Africa in

68

On Agreement on Trade Facilitation, Article 8 (1) provides: “ A member shall ensure that its authorities

and agencies responsible for border controls and procedures dealing with the importation, exportation,

and transit of goods cooperate with one another and coordinate their activities in order to facilitate trade.

(2) Members shall, to the extent possible and practicable, cooperate on mutually agreed terms with other

Members with whom they share a common border with a view to coordinating procedures at border

crossings to facilitate cross-border trade. Such cooperation and coordination may include: (i) alignment of

working days and hours; (ii) alignment of procedures and formalities; (iii) development and sharing of

common facilities; (iv) joint controls; and (v) establishment of one stop border post control.

69 Supra, note 64. An example of this is the Cinkase OSPBP between Burkina Faso and Ghana, which are

both part of ECOWAS member states.

70 Id. Note that the region commonly referred to this as joint border post.

71 Id. The UEMOA resolution 04/97/CM/UEMOA contained the joint border post that adopted an action

plan for transport infrastructure. In November 2001, resolution 08/2001/CM was adopted to purposely

fund the construction of eleven joint border post.

72 Id. See ECOWAS, EU AND UEMOA, 2008.

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September 2013 reinforces the point made above.73

The meeting came out with a

recommendation that the Africa Union Commission, the Regional Economic Communities, and

all their partners should develop what is known as a continental policy framework on

coordinated Border Management which is to be adopted by the organ of the African Union

responsible for policy.74

In order to boost a good level of intra-Africa trade facilitation, which is a cumulative of

trade facilitation in each Africa country, there needs to be a holistic compliance with the new

ATF. What Nigeria has done in the implementation of the ATF is commendable but not total.

Other number of factors account for poor level of trade facilitation and intra-Africa trade

or inflow of trade to Africa countries from the developed economies. Corruption among the

customs officials is a pervasive issue in Africa. There is no doubt that these may be discouraging

factors for traders to further ship-in their goods to Africa market given the fact that corruption

tends to cause traders to pay higher than necessary on their goods before final clearance. It has

been noted that customs administrations are likely the world‟s most vulnerable organization to

corruption.75

The reason for this may stem out of the fact that customs administrations are

located at the heart of international supply chain. They are also systematically positioned to

facilitate trade or delay it.76

In many countries of the world, especially in Nigeria, a key

ECOWAS member state, many of the customs officials are corrupt. A trader can hardly pass

73

Supra, note 69, at 30.

74 Id.

75 Supra, note 39, at 28.

76 Id.

Page 20 of 30

through the Nigeria customs border without having to pay bribe whether in the form of tips or

gratification.77

Now that ECOWAS and other regional bodies in Africa are moving towards trade

liberalization for the whole of Africa, there is the possibility that corruption may increase. The

Washington Council on International Trade noted that the spread of bribery and other illegal

payment or gratifications around the world tend to stand as a significant barrier to trade

facilitation across the world.78

Infrastructural is another huge challenge that limits intra-Africa trade. In the last many

years, ECOWAS has identified poor infrastructure, which includes bad road networks, dearth of

rail transport coupled with its unreliability and inefficiency of the few in existence, lack of power

supply and water, as key in limiting the level of intra-Africa trade.79

Empirically, in Nigeria for

example, there is dearth of railway transport system. This problem is prevalent in most of

ECOWAS member states. In Lagos State of Nigeria, which is considered as the commercial hub

of Nigeria and the most viable economic city in West Africa, there are few railway systems.

Most of the goods moved across Nigeria are through road transport system. The consequence of

this is unmitigated disaster. There are frequent accidents on the road which kill not less than an

77

This writer is from Nigeria and he is aware of the corruption that goes on in the customs. Corruption in

customs is so deep rooted that people even pay money to be employed in customs notwithstanding that

the applicant meets all the required qualifications to join Nigeria Customs Service.

78 Id.

79 See Towards an African Continental Free Trade Area, Assessing Regional Integration in Africa V, at

95, available at www.uneca.org/sites/default/files/publications/aria5_print_uneca_fin_20_july_1.pdf.

Page 21 of 30

average of fifty people at a time. The foregoing reason has been described as one of the reasons

why sub-Sahara Africa has been marginalized from world trade.80

When there is only one means of transporting goods, there is the tendency that transport

costs will increase. It has been noted by Limao and Venables (2000) that a general 10 percent

decrease in transport costs could jack up trade volumes by up to 20 percent.81

Regional cross

border infrastructure such as transport, energy, and water have the potential of boosting intra-

trade among ECOWAS member states and as well among other regions in Africa.82

It can also

engender regional and national comparative advantages which will address the special needs of

the landlocked ECOWAS member states.83

Lack of adequate infrastructure constitutes an important obstacle to Foreign Direct

Investment (FDI) among the ECOWAS member states.84

In a survey by United Nations

Conference on Trade and Development (UNCTAD), and ICC on the possible factors that

influence FDI decisions, it was discovered that twenty five (25) percent of the total responses

showed that the state of physical infrastructure is an important factor in determining whether to

invest in a country or not.85

IV. REGIONAL FREE TRADE AREAS (FTAS) AND CONTINENTAL FREE TRADE AREA (CFTA)

80

Id, at 95.

81 Id.

82 Id.

83 Id.

84 Supra, note 39, at 7.

85 Id.

Page 22 of 30

Regional Free Trade Areas and Continental Free Trade Area are fundamental for trade

facilitation in Africa. The ECOWAS‟ objectives, as noted above, which, inter alia, are

cooperation and economic integration are expected to eventually lead to economic and monetary

union that will completely integrate its member states in the area of national economies and as

well lift their standards of living and boost their economic stability.86

A detailed discussion of this section may not be proper without a brief discussion of the

establishment of the Free Trade Areas (FTAs) and the Continental free Trade Area (CFTA). In

October 2008, the Heads of State and Government of the three Regional Economic

Communities87

(RECs) agreed to establish an FTA.88

The tripartite FTA brings together twenty

six Africa countries with a total population of about 530 million people89

with a GDP of USD630

billion, or more that what is considered as the output of Africa‟s economies. These FTAs have

attracted the interest of Africa‟s policy makers towards a broader CFTA.90

At the 6th Ordinary

Session of the African Union Ministers of Trade in Kigali in November 2010, it was

recommended by the African Union Ministers of Trade that establishment of an African

Continental Free Trade Area should fast tracked.91

A detailed discussion of this is later done in

this paper.

86

See United Nations Economic Commission for Africa, Assessing Regional Integration in Africa V,

Towards an African Continental Free Trade Area, at 17, available at

uneca.or/sites/default/files/publications/aria5_print_uneca_fin_20_july_1.pdf.

87 Id

88 Supra, note 83, at 1.

89 Id.

90 Id.

91 I.d

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Six among the English speaking member states of the ECOWAS92

as at 2012 were setting

up a second93

West Africa Monetary Zone which is part of the efforts to ensure an eventual

monetary union in the ECOWAS region. With respect to free trade in West Africa region,

ECOWAS emphasized three major areas. ECOWAS noted that it is establishing a Free Trade

Area (FTA) through the ECOWAS Trade Liberalization Scheme.94

The second is the setting up

of a Common External Tariff (CET) for the region. In this regard, an important step was taken

when it formally adopted the ECOWAS CET structure in January 200695

with a creation of

ECOWAS-UEMOA96

Committee which was shouldered with the responsibility to conclude the

project.97

The third step is the directive given to the ECOWAS Commission by ECOWAS

Council of Ministers to take every necessary steps needed in order to render assistance to

member states that were yet to adopt a value added tax (VAT).98

Trade facilitation in West Africa region and in Africa continent as a whole within the

concept of FTA/CFTA cannot be effective without free movement of people. The member states

of ECOWAS adopted the protocol of Free Movement of Persons, Residence and Establishment

in Dakar, Senegal in 1979.99

The adoption of the Protocol guarantees the nationals of the

92

The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

93 The first was set up forty-one-years ago which is called West Africa Economic and Monetary Union

(UEMOA). 94

Supra, note 83.

95 Id.

96 UEMOA means West African Economic and Monetary Union.

97 Supra, note 87.

98 Id. Good progress is noted to have been made in the implementation of this Protocol as touching on free

movement of people in the region without any visa restriction.

99 Id. This Protocol was adopted in the month of May, 1979.

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member states of ECOWAS, inter alia, the right to freely move, reside, and establish economic

activities in the territory of that member state.100

The CFTA is a veritable avenue for Africa to achieve a high level of trade facilitation

which could be intra-African trade or trade with other countries outside the continent of Africa.

The CFTA offers a good opportunity which has the potential to transform the different political

and economic African entities into a manageable and a balanced uniform market.101

It has been

noted by the United Nations Economic Commission for Africa (UNECA) that “a gradual

merging of national units and Regional Economic Communities (REC) to a single continental

unit will increase the market that will in turn create a larger economies of scale. Consequently, it

will encourage specialization in primary and industrial production of tradable products”.102

High tariffs are potential limitations to a robust intra-African trade.103

Elimination of the

high tariffs, which are considered as barriers, on goods across Africa through the establishment

of CFTA will increase positive trade.104

Nevertheless, if the CFTA is complemented by trade

facilitation measures, there is the probability that all African countries will positively benefit

from the establishment of CFTA both in terms of trade and real income.105

The objective behind the creation of the CFTA will be to establish a single market that is

characterized with free movement of goods and services which will bring about social and

100

Id.

101 Id at 34.

102 Id.

103 Id.

104 Id at 43.

105 Id.

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economic development in West Africa and Africa as a whole.106

The CFTA will assist to broaden

and at the same time deepen the much needed opportunities for exporters. This may be achieved

by removing the barriers to trade and investment and subsequently building the institutional

structures in order to enable trade and investment links to expand exponentially.107

There is no

doubt that intra-regional trade will be effectively improved by the CFTA because there will be

creation of bigger market which will stimulate investment and give the room for

competitiveness.108

Further, is the a well asserted fact that free trade has an overwhelming effect on

economies in order to increase their global share of market.109

The small economies, like that of

the African region specifically benefit from this.110

On the side of the FTAs which are

cumulative of CFTA, the FTAs offer more opportunities for investors. They also make a high

level of certainty and transparency which allow for free operations for the investors.111

IV.a. WAY FORWARD

It has been canvassed that a CFTA protocol could be encouraged by the WTO principle

of Most-Favored Nation (MFN) treatment. The essence of the MFN treatment will be to ensure

that members of the CFTA are not allowed to discriminate against one another. Related to this is

106

Id at 55.

107 Id.

108 Id.

109 Id.

110 Id.

111 Id.

Page 26 of 30

also the principle of “national treatment” which will definitely ensure that products that are

imported from other CFTA member states are not subjected to unfair national treatment by the

importing member states.112

Trade in goods and services can be liberalized in the CFTA. In order to do this, measures

should be taken which will address the fact that members need to identify and agree on qualified

goods and services for preferential treatment through a list of clear and unambiguous rules of

origin that are easy to administer. It must also be ensured that the rules of origin must be capable

of promoting a mechanism that can add value along the continental production chain.113

The

CFTA will need to be protected against any likely unfair trade practices that may affect the

essence of establishing a CFTA. Thus, it is important that the CFTA adopts a competition policy

that has institutional and implementation mechanism in place.114

It has been noted by UNECA that the CFTA should allow members to take remedial

trade measures which could include safeguards and anti-dumping and countervailing measures

whenever there seems to be a threat that arises from implementing the CFTA.115

In order to have

a robust CFTA that achieves the aim of its establishment, then the CFTA may need a provision

that will protect its upcoming industries.

Attempt to fast-track the African CFTA additionally require building on the experiences

and structures of the Regional FTAs.116

In reality, the regional FTA should constitute the basis

112

Id at 56.

113 Id.

114 Id.

115 Id.

116 Id.

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for establishing the provisions of the proposed protocol for the CFTA.117

The CFTA will have to

reduce and streamline the costs of customs clearance and transport and other administrative

procedures.118

In this regard, if the full benefits of integration are to be realized, cross border

infrastructure has to be significantly improved.

The CFTA members may have to appreciate the importance of standards, metrology,

conformity assessment and accreditation.119

Thus, there needs to be harmonization of practice in

this area in order to achieve mutual product recognition.120

Also, there is the need to promote

cooperation with national, regional and international bodies. Members of the CFTA will then

need to develop and at the same time adopt a policy framework that is consistent with the

provisions of the relevant WTO agreement.121

In the CFTA, the concept of sanitary and phyto-sanitary measures cannot be overruled.

The member states of the CFTA will have to develop a framework for streamlining such

measures to enable regional product certification.122

Notably is the fact that any measure that

must be in respect of this must comply with the WTO agreement. This will assist to ensure that

the measures do not constitute technical barriers to trade facilitation which is the objective of

developing such measures.123

It has been suggested that the CFTA member states will need to adopt policies that will

create a conducive climate for cross-border investment. The same policy which will also reduce

117

Id. 118

Id. 119

Id. 120

Id. 121

Id. 122

Id at 57. 123

Id.

Page 28 of 30

transaction costs and create an enabling environment for private sector development should also

be adopted.124

There is no doubt that services are significant to Africa‟s economy and

development. This is more essential in marketing and distribution of goods.125

Thus, African

trade in services must be boosted. One of the ways in which Africa trade in service can be

boosted, in my opinion is when the CFTA carries out an aggressive liberalization of trade in

services in those sectors of Africa economy that are very critical to the economic integration of

Africa region as a whole.126

In the propose CFTA, it is trite that there is no way that there would not be disputes

among member states to the CFTA. As a result of this, it has been proposed that there should be

an efficient dispute resolution mechanism which will adjudicate any disputes that may arise

among member states to the CFTA.127

Thus, the dispute settlement mechanism could be based on

the principles of cooperation and consultation among the members that are concerned in order to

have a mutually and satisfactory settlement. Mediation and Arbitration should be integral to this

proposed dispute resolution mechanism under the CFTA, given the fact that the CFTA is a group

of many sovereign nations.128

It has been noted that the proposed CFTA would operate at its best when there are some

organs within it shouldered with some responsibilities.129

Given the fact that the proposed CFTA

is a continental arrangement, it was noted that it would have to operate under the existing, and

124

Id.

125 See United Nations Economic Commission for Africa, supra, note 121 at 57.

126 Supra, note 122.

127 Id.

128 Id.

129 Id at 58.

Page 29 of 30

any possible new institutional organs of the AU.130

Such organ may include: AU Summit of

Heads of State and Government. This will be the political authority of the CFTA.131

The second

organ will be the AU Conference of Trade Ministers. Their responsibility will be in the area of

overseeing and guiding technical works. It may also include negotiation and overall support in

formulation and implementation of policy as touching on trade liberalization in Africa under the

CFTA umbrella.132

The third organ will be the AU Sectoral Ministerial Committees. It has been

opined by the UNECA that this organ will provide support for policy formulation in respective in

the areas that their support will be needed.

V. CONCLUSION

West Africa and Africa region entirely remain a large potential market for trade

facilitation. There is no doubt that there are current efforts on the part of some countries in West

Africa and Africa in general to ensure that there is compliance with the new ATF which is yet to

come into force in order to allow for trade facilitation which will cumulate to Africa

development. Essential to this are efforts to ensure that the infrastructure system in Africa is

revived.

In Nigeria, there have been efforts in Lagos State to ensure that the infrastructure systems

are brought back to life. It is the belief that infrastructure is the backbone of development in any

nation. With particular reference to rail transport system, the government of Lagos State recently

signed an agreement with China Civil Engineering Construction Company (CCECC) to construct

130

Id. 131

Id. 132

Id.

Page 30 of 30

an inter-cities rail lines.133

At the Federal level, the federal government has also been making

concerted efforts to ensure that there is a total overhaul of infrastructural facilities in Nigeria.

Integral to this is railway transport system.134

Aggressive procedures and removal of barriers at various borders in Africa continent is

essential to witnessing the much awaited trade facilitation within the Africa region and the rest of

the world in a smooth and efficient manner. Further to this, as noted before in this paper, there

must be a holistic compliance with the new ATF. Total compliance with the provisions of the

ATF that is yet to come into force will improve intra-Africa trade and trade facilitation in Africa.

Aside this, it will significantly improve Africa economy which will in turn improve the standard

of living of Africa citizens.

133

http://www.lagosstateppp.gov.ng/projects/project_portfolio/project_in_procurement.asp. Note that this

writer worked on this project whilst he was at the Office of Public-Private Partnerships, Lagos, Nigeria. 134

http://www.icrc.gov.ng/