As regional body moves to create a department in charge of private sector at its commission
By Sanna Camara
The ECOWAS Commission has recogniesed that member countries need “a two-digit growth rate” from their current single-digits, in order to properly address the development needs of its member countries.
The president of the ECOWAS Commission made this revelation at a press conference held after the just-concluded launching ceremony of trade and economic integration and competitiveness project at its secretariat in Abuja.
“Let me stress the importance of these two projects to our regional integration process,” noted the ECOWAS president: “The growth rates in our ECOWA region is about 6 to 7 per cent a year. So in order to meet the needs of our people, it is generally considered that we need a two-digit growth rate… There now comes the importance of trade and investments in our regions, and the key role of our private sector.”
Kadre Desire Ouedrago argued that in order to promote investment, “you have to first of all create a regional market, removing barriers to trade, allowing people to move freely, but also you have to create a conducive environment for investment in order to encourage the private sector. This is what these two projects will help us to achieve.”
ECOWAS creates a specific department in charge of private sector
He said the role of the private sector has been recognised by the regional body, which is the reason why in the extension o commission members from 9 to 15 members, the heads of state and governments have decided to create a specific department in charge of private sector.
Speaking earlier at the alunch prior to the press conference, President Ouedrago said it is obvious that the ultimate goal of these projects is economic growth and poverty reduction. “The goal can be however, not attained without taking the account of the new social challenges. Nor can it be achieved without the consolidation of peace, stability and democracy in West Africa,” he said.
“I take this opportunity to reiterate the region’s political commitment to driving these sectors, and commend the leadership of the Heads of State and Governments, particularly regarding the free movement of persons and goods, in the implementation of trade liberalisatio schemes, as well as the provision of quality regional infrastructures,” he told the gathering.
To be implemented in a three-year span by UN Industrial Development Orgaanisation, the World Bank and German International Development Cooperation agency, GIZ, the project seeks to accelerate the process of achieving customs union by supporting the ECOWAS Commission improve the Trade Liberalisation Scheme, develop a common trade policy, facilitating the harmonisation of trade related policies and statistical data, as well as disseminating trade related information.
The new programme will be different
But how will this new programmes be different from those of the past, which have been popularly criticized for achieving very little, the World Bank country Director, who informed the gathering that she started the regional cooperation negotiations and agreement on behalf of the world Bank some 14 years ago, argued that this one is special.
The new programme will be different – we have learned from the lessons from the past programs, taking into consideration the successes and shortcomings, and using those have been used to plan this one, Marie Francoise-Nevy explained.
“…when we look at the numbers of regional trade within West Africa, looking at current trade figures, they amount to 7 per cent. But when you take aside Nigeria, the flows from Nigeria to the region, 90 per cent of them being oil sector, you actually find that the level of integration is higher at 60 per cent,” she said, noting that in some countries, the integration is deeper.
“For example, Togo is almost 60 percent, Senegal 46 per cent… just to reinforce the point that there have been good news. Of course we have to do better than we already have …,” she said at the launch.
The World Bank diplomat explained that the way global trade and foreign investment is moving rapidly, going away from a situation where countries were producing end-products to disseminate them either in their countries and other markets, to other movements where global trades and FDIs are inter-related.
Investment regimes vary from country to country
In terms of the first component, Ms. Francoise-Nevy said it is about how to facilitate cross border investment. “And we have noted that the investment regimes vary from country to country. Each country provide some incentives, but are they harmonised so that we can facilitate a global value chain, not just looking at individual countries,” she said.
She added that they are also looking at “transfer pricing” to ensure that through that system, companies are not levying charges in one country so that they can reduce their taxable income in another – “this is what we call transfer pricing, avoiding that and having it properly regulated,” she said.
The second component, which is the regional integration…. “We are now coming into this component to look at what happens at various borders, at the ports, what re the various procedures to clear customs, to facilitate the movement of good; at the physical borders, what is happening…. You heard that under the Lagos-Abidjan corridor, they are now trying to establish a high way to facilitate a smooth flow of goods and people. For these to work, we need to work with member states and the region, to ensure there is coherence…”
Integration can contribute to growth, poverty reduction, peace, stability
Brian O’Neill, head of cooperation, GIZ, also noted that increased regional economic and trade integration can contribute not only to growth and reduction of poverty but also to stability and peace.
“We do hope that entrepreneurs will seize market opportunities in sustainable and inclusive ways so they benefit from coherent policies to be implemented by the regional and global trade agreements’ private sector policies,” Mr. O’Neill, whose government is contributing 1millio Euros to the programme, said.
“At the end of day, the impact of the program should not be so much measured in the question of improved trade statistics, but rather in the answer to the question will it help the people of west Africa to have better life and future, will they have better food security, will it have increased growth in rural areas, will employment be created, investments promoted in the industrial sector, does life really improve for the people?”
Low trade interaction, at 11 per cent
The EU envoy to ECOWAS and Nigeria decried that the West African countries have a very low trade interaction, which during the last 25 years has remained at 11.15 per cent of their total trade.
“Hopefully, the full implementation of the single market, and the elimination of custom barriers will give a boost to intra-regional trade flows. But these are challenging goals,” Mr. Michel Arrion stated, adding that moreover, poor physical infrastructure (roads, ports, access to energy) also hampers the ability to exchange goods and services across countries.
“In terms of attracting business, both domestic and foreign, West Africa is generally portrayed as a difficult to do business. The overwhelming members of ECOWAS are clustered at the bottom 25 per cent of the World Bank Doing Business ranking…. An investment regulatory regime which is not always transparent and predictable, also plays a role,” he stressed.
Changing unsatisfactory status quo requires addressing key challenge
West African efforts to improve trade and investment conditions at home should be matched with a parallel commitment to further integrate into the world trade system, the EU diplomat noted:
“Presently, the population of West Africa in global trade is very small, and based mostly on exports of commodities and raw materials. Changing this unsatisfactory status quo requires addressing the key challenge of developing a competitive private sector capacity – particularly given the existing low levels of industrialisation, ensuring that products meet compliance with international standards and technical regulations.
“Integration into the world trade system means also being ready to negotiate and conclude trade agreements with foreign economic partners, agreements which are mutually beneficial and set gradual paths for opening up access to markets.
“These challenges are not insurmountable…. West Africa is still growing, so we have to consider them as opportunities which, if addressed, could allow the region to leap-frog forward in its development quest,” the diplomat observed.