Accelerating Trade in West Africa (ATWA) is a new initiative aiming to establish a durable, multi-donor vehicle dedicated to advancing regional integration, expanding trade and lowering trade costs along key trade routes in West Africa. At present, ATWA is financed by the Danish aid agency, Danida, although other development partners have already expressed interest to join.

The ATWA scoping and design phase is being executed by Saana Consulting Ltd over the period February 2015 to October 2016 and will cover both “soft” policy and trade facilitation issues and “hard” infrastructure constraints to ensure meaningful impact.

Trade facilitation and market integration issues have repeatedly been highlighted as the key to unlocking greater gains from trade in West Africa by Heads of States and Government of the Economic Community of West African States (ECOWAS). ATWA comes at a crucial moment for regional integration in West Africa. Amongst recent developments, the advent of the ECOWAS Common External Tariff (CET), on-going efforts to strengthen the free movement of goods in the region, and the introduction of several Joint Border Posts (JBPs) in the Union Économique et Monétaire Ouest Africaine (UEMOA) and ECOWAS are a positive signal that regional integration is moving forward.

ATWA seeks to build on that momentum. At present, donor support to regional trade and integration in West Africa is already substantial, but it is fragmented. This increases the complexity and transaction costs of regional efforts, for donors and recipients alike, and reduces the resources available for achieving meaningful results. ATWA rests on the idea that a more integrated, longer-term approach could achieve better results.

ATWA takes inspiration from East Africa, where eight donors (Belgium, Canada, Denmark, Finland, the Netherlands, Sweden, United States and the United Kingdom) have pooled their support and established a single non-profit organisation working across the East African Community (EAC) to further its integration agenda. The organisation, TradeMark East Africa (TMEA) currently has a budget of USD 650 million over 2011-2017 and works in the five EAC countries and South Sudan to reduce trade costs on major transport corridors and improve the business environment for trade and investment. TMEA is ATWA’s technical partner.

Approach

ATWA, as a scoping and design exercise, is structured according to three consecutive stages:

• A first stage selecting one or several trade routes in West Africa that ATWA could focus on initially as regards to their potential for development. This includes a literature review and a preliminary round of consultations with regional organisations, national governments, private sector interests and donors already active in the trade and transport field in West Africa, in order to identify their interests, priorities, challenges, opportunities and existing initiatives that ATWA can build upon.

• A diagnostic stage, in which a set of studies will establish the sources of delays and costs in international and intraregional transport along a defined group of trade routes in West Africa, and outline a number of interventions that ATWA could initially implement in order to improve trade flows. These studies will engage public, private and civil society stakeholders across the region in order to get a comprehensive picture of needs and priorities, opportunities and bottlenecks. The ATWA project team will also organise a study visit to the EAC by a West African delegation.

• A final stage which will include the development of a clear and costed programme document to be presented to regional and national authorities, as well as interested donors. As part of this stage, Danida and the project team will devise the budget, governance options and a roadmap for ATWA’s implementation phase.

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Regional Context

ECOWAS and UEMOA plans and priorities

ECOWAS is the only regional economic commission recognised by the African Union in West Africa and has 15 Member Sates. UEMOA, the second regional commission in West Africa is composed of 8 Member States whom are all also part of ECOWAS.

ECOWAS Vision 2020 identifies 242 priority projects for a total estimated cost of almost USD 27 billion. About half of them are in the fields of free movement of people and goods, regional integration, transport infrastructure and food security, and could potentially be of interest to ATWA. UEMOA is working on an updated Community Action Programme on infrastructure and road transport, which should be ready by the end of 2015.

There are about 125 ECOWAS projects which could be of interest to ATWA. ECOWAS’ latest and most ambitious road project to date is the construction of a six-lane highway from Lagos to Abidjan, which was agreed by the Heads of State of the concerned countries in a Treaty signed in March 2014 and which may get funding from China.

In the field of trade policy, a major achievement is the agreement on the structure of the ECOWAS/UEMOA CET agreed in 2013, which is currently being implemented. Should the CET be implemented effectively in the years to come this could lead to the reduction of barriers to trade amongst ECOWAS Member States and open the way for the creation of a full Customs Union and Common Market in goods.

In 2001 UEMOA adopted a Community Action Program for Infrastructure and Road Transport (Programme d’actions communautaires des infrastructures et du transport routiers – PACITR). As part of that program, UEMOA defined eleven priority corridors which were to be upgraded.

The action programme also called for the construction of 11 JBPs and an Observatory of Bad Practices (Observatoire des pratiques anormales – OPA). UEMOA is presently in the process of developing an updated community action program for infrastructure and road transport development, which is scheduled to be ready before the end of 2015.

Legal environment

From a regulatory perspective the lack of progress in regional integration is not because of lack of legal instruments but mostly because they are not effectively implemented. There are still national and bilateral agreements that hinder the free movement of goods and people, such as cargo sharing quotas, first-come-first-served shipper and transporter matching arrangements, and compulsory cargo insurance requirements. However cargo sharing and cargo matching rules are nowadays only enforced on a few corridors. Export bans, standards based barriers and residual import tariffs are also still present amongst ECOWAS Member States.

The most relevant regional regulations for ATWA cover different sectors.

For trade policy these are:

1. The ECOWAS Trade Liberalization Scheme (ETLS) and its various instruments, establishing the internal free trading regime in ECOWAS.

2. The recently adopted ECOWAS Common External Tariff and its Supplementary measures of protection, establishing a common tariff schedule for all ECOWAS member States.

For customs and trade facilitation:

3. ECOWAS Decision A/DEC/13/01/03 Relating to the Establishment of a Regional Road Transport and Transit Facilitation Programme in Support of Intra-Community Trade and Cross-Border Movements.

4. Joint Border Posts: Supplementary Act /Sa.1/07/13 Relating To The Establishment and Implementation of the Joint Border Posts Concept within Member States of ECOWAS establishes, among other things, the legal framework of Joint Border Posts.

5. Checkpoints : Décision N°15/2005/CM/UEMOA Portant Modalités Pratiques d’Application du Plan Régional de Contrôle sur les Axes Routiers Inter-Etats de l’UEMOA.

6. Corridor management committees: Décision N° 39/2009/CM/UEMOA Portant Création et Gestion des Corridors de l’Union.

And in the field of interstate transport and transit:

7. The 1982 ECOWAS Convention A/P2/5/82 Regulating Inter-State Road Transportation (between ECOWAS Member States, referred to as the IST Convention).

8. The 1982 ECOWAS Convention A/P.4/5/82 Relating To Inter-State Road Transit of Goods – referred to as the ISRT Convention. This Convention establishes the conditions under which cargo can be transited through member states.

9. Axle Load control: UEMOA Règlement N°14/2005/CM/UEMOA Relatif à l’Harmonisation des Normes et des Procédures du Contrôle du Gabarit, du Poids, et de La Charge A l’Essieu Des Véhicules Lourds de Transport de Marchandises dans les États Membres de l’UEMOA.

There are other, more specific regulations dealing with, for example special regimes for the intra-community trade of staple food products that are not reviewed here but could be of relevance for interventions in more specific sectors.

Traffic flows

Traffic flows are heaviest in the southern part of the coastal countries in West Africa, which is also where most people live and where most economic activity takes place. The busiest road transit corridor is Cotonou-Niamey, probably because a large volume of goods transported on that corridor goes to northern Nigeria. The next busiest transit corridor is Lomé-Ouagadougou. Transit traffic is very unbalanced with export volumes from landlocked countries being about 10 percent of import volumes. Intra-regional traffic flows are about 50 percent of transit flows. The African Union’s Programme for Infrastructure Development in Africa (PIDA) initiative forecasts that traffic volumes in West Africa will grow 80-fold from 7 million tonnes (mt) in 2007 to 176mt in 2020, to 300mt in 2030 and to 556mt in 2040.

Road transport services

In West Africa, road transport services are expensive and of poor quality. Truck fleets are old and operators small and not very professional. For example, the average truck in Benin is more than 27 years old and, of 15,700 Benin transporters, 10,000 operate a single truck and another 4,500 operate an average of 2.5 trucks each, while the 16 largest operate fleets of only 84 trucks per fleet, on average. Inefficiencies are numerous and truck utilization very low with the average transit truck spending only about 30 percent of turn-around times travelling while 70 percent of the time is spent waiting in ports or at an inland terminal.

Road transport

The major trade corridors in West Arica have seen many improvements to road quality in the last number of years and the network has probably never been as good as it is today. More than 90 percent of the movement of freight and passengers in the ECOWAS region takes place by road.

The ECOWAS region has only 4.7km of road per 100km, which is lower than the average of 6.8km for the African continent as a whole. Still, relative to GDP, West Africa has a large road network and in Niger, for example, the asset value of the road network exceeds 30 percent of GDP, an indication of the large economic burden of maintenance. Therefore, conserving the road infrastructure is an important challenge which ECOWAS member states address from two angles.

First, many countries have established independent road maintenance funds financed by fuel levies and tolls, but generally that only covers about half the required amount. The second approach is to limit premature wear and damage to roads by enforcing axle load controls. This has been a very serious problem for many years as trucks loaded to almost three times the legal limit have been plying the corridors, destroying the roads and presenting great hazards to road safety. Progress has been slow but as of 2014 all major countries in the region had axle load control programmes in place.

Checkpoints and road governance

The excessive number of checkpoints along inter-state roads in West Africa has been, and still is, an important barrier to the free movement of goods and people. UEMOA with the support of USAID’s West Africa Trade Hub established an “observatory of bad practices”, the Observatoire des pratiques anormales in 2006 to document the situation, hoping that monitoring and advocacy would solve the problem. But the problem has not been solved and in early 2015 the number of checkpoints in Ghana on the Tema-Ouagadougou corridor, for example, had mushroomed to about 50.

However, past donor programmes have found that the amount of bribes paid at checkpoints is relatively low for “legal” trucks – trucks meeting all regulatory requirements, carrying cargo properly documented, and driven by drivers with all papers in order. Most informal payments for a given consignment are paid in ports or inland terminals where goods are cleared and money changes hands. However, for informal trade or trucks carrying perishable goods the harassment is very serious and can amount to the equivalent of USD 70 per 100km.

West African Corridors: Overview and comparison

West African corridors can be divided into two categories: transit corridors and intraregional corridors. Transit corridors link a port with a landlocked country, running from North to South, while intraregional trade corridors link multiple countries from East to West.

This report reviews all major corridors in West Africa. These include, from West to East:

1. Lagos-Kano-Jibiya in Nigeria (NG) to the border with Niger (NE) and beyond

2. Cotonou, Benin (BJ) - Niamey, (NE)

3. Lomé, Togo (TG) - Ouagadougou, Burkina Faso (BF)

4. Tema, Ghana (GH) - Ouagadougou, BF

5. Abidjan, Côte d’Ivoire (CI) - Ouagadougou, (BF)

6. Abidjan, (CI) - Bamako, Mali (ML)

7. San Pedro, (CI) - Bamako, (ML)

8. Conakry, Guinea (GN) - Bamako, (ML)

9. Dakar, Senegal (SN) - Bamako, (ML)

There is less information available on intraregional corridors in ECOWAS, but we also present evidence and data available about the two main East-West corridors in the region:

10. Dakar, (SN) - Niamey, (NE)

11. Dakar, (SN) - Lagos, (NG)

West African corridors: Overview of main features

Basic data detailing transit flow volumes, the number of checkpoints on the corridor and the amount of formal and informal payments paid along the road by transporters is available for nearly every corridor.

Transit corridors

Lagos-Kano-Jibiya (LAKAJI): This is not strictly speaking a transit corridor although it serves markets in Niger and beyond. The port-city interface is very congested, and it is expensive to move containers out of the port. The corridor costs are high compared to other countries in the region, and levels of road harassment are the highest in the region. There are also significant security concerns in Northern Nigeria.

Lagos ports have a 2015 projected capacity of 1,450,000 TEU. They currently have no Single Window. On the positive side, the railway is being upgraded and may help ease port congestion and improve port-city interface.

Cotonou-Niamey: The Cotonou-Niamey corridor is the busiest West African transit corridor (2.2Mt). However much of the goods carried on this corridor are destined for northern Nigeria, competing with the more expensive LAKAJI corridor described above. It is the least costly corridor in the region (USD 3,938). The delays at the border crossing and checkpoints are also the lowest in the region at 98 minutes. Road harassment is low for transit import through Benin because the country imposes the presence of military personnel in transit trucks to Niger. The road harassment issues are more present once the truck crosses into Niger and on the return trip to the port.

On the negative side, Customs convoys, quotas and the tour-de-rôle system are still in place, suggesting that a reform of the transport sector is needed if reduction of costs along the corridor is to be passed on to consumers. The corridor also exhibits the highest truck turn-around time (19.7 days).

The Cotonou port was recently upgraded and has a projected 2015 capacity of 400,000 TEU. A Single Window is in place since 2013. The Dutch Embassy will sponsor the development of a port master plan to be undertaken by the Port of Amsterdam (this activity was temporarily suspended because of embezzlement of Dutch funds in Benin, but is set to resume shortly).

Informal trade and smuggling between Benin and Nigeria, and possibly also between Niger and Nigeria, is very high. The Netherlands has been sponsoring a project focusing on formalizing informal trade between the two countries.

A JBP is being built on this corridor between Benin and Niger (Malanville).

Lomé-Ouagadougou: This is the most important transit corridor for Burkina Faso. Costs are lower than average at USD 4,092, and it has the lowest truck turn-around time (11.6 days). The delays at border crossings and checkpoints are also below average at 122 minutes, and harassment levels for transit import through Togo are low because gendarmerie checkpoints have been abolished. They are however quite high in Burkina Faso. GPS tracking is used in Togo, but police convoys are still used in Burkina Faso. Quotas and tour-de-rôle are loosely implemented to allocate cargos to truckers, if at all. Informal payments are the highest recorded (USD 349) – 8.5 percent of total costs.

The Lomé Port is being expanded and has a 2015 projected capacity of 1.25 million TEU. A Single Window was launched in 2014, and important set of expansion projects is under way.

The region’s first JBP was built on this corridor between Togo and Burkina Faso (Cinkassé). The JBP is operational but the customs systems either side of the border are not interconnected and few processes have been harmonized and simplified.

Tema-Ouagadougou: The Port of Tema complains that is has lost importance as transit port (transit to Burkina Faso has dropped to 358,000t) because Ghana has been implementing axle load control regulations for longer and more stringently than any other country in West Africa. Current low transit figures may therefore not reflect the true potential of the corridor.

Performance indicators are mixed with a lower than average corridor cost (USD 4,058), lower than average truck turn-around time (13.1 days), but above average delays at border crossings and checkpoints (265 min). The corridor has high level of controls (particularly in Ghana) but the lowest overall level of reported bribes and informal payments along roads and in ports and terminals (USD 125) – 3 percent of total costs.

The Port of Tema has a billion-dollar expansion project and a 2015 projected capacity of 800,000 TEU. The Single Window was launched in 2002, and is the first Single Window in West Africa. The port has also recently installed a modern gate system. Ghana customs uses GPS tracking and quotas and tour-de-rôle are no longer enforced. The Ghana customs authority has an agreement with Burkina Faso and Mali customs authorities to implement a single customs guarantee.

Abidjan-Ouagadougou/Abidjan-Bamako: Abidjan-Ouagadougou has both a road and a rail corridor. With road and rail combined, this is the second most important corridor for Burkina Faso (848,000t) and will probably grow if the railway is upgraded and extended to Niamey and Cotonou, as planned. Abidjan-Dakar is the second most important corridor for Bamako (700,000t).

The corridors have higher than average costs (USD 5,095 to Ouaga and USD 4,870 to Bamako), above average truck turn-around times (17.5 days for Ouaga and 15 days for Bamako), but below average delays at border crossings and checkpoints (165 min and 234 min respectively). The corridors have high levels of controls (21 and 37 respectively) and above average levels of bribes at controls (XOF 39,300 and 47,000 respectively). Mali has the highest level of harassment and bribes among countries participating in OPA.

The Port of Abidjan has a large expansion project and a 2015 projected capacity of 1,000,000 TEU. A Single Window was launched in 2013, and the Côte d’Ivoire customs authorities use GPS tracking in partnership with the Chamber of Commerce. The tour-de-rôle and freight sharing quotas are present on paper but not fully enforced due to a lack of trucks in Cote d’Ivoire.

The Côte d’Ivoire customs authorities have an agreement with Burkina Faso, Mali and Senegal customs authorities to inter-connect their systems and a costed project ready to be implemented (estimated at USD 7.6 million). Cote d’Ivoire and Burkina Faso also have agreed with the World Bank to implement transport sector services reforms in return for a USD 50 million Development Policy Operation (DPO) loan for each country.

Dakar-Bamako: Dakar-Bamako, like Abidjan-Bamako, has both a road and a rail corridor, but the rail corridor is dilapidated. The company Transrail obtained a concession for the railway in 2003 but has not invested in the line.

The Mali Transport Observatory reports that 288,000t were transported by rail in 2013. The USAID Projet de Croissance Économique (PCE) project reported that the rail corridor was the least expensive of all West African corridors (USD 2,703) but it is not sustainable as the line is not being maintained.

The Dakar-Bamako corridor is the second busiest transit corridor (1.7 Mt) in West Africa. In 2015, a second, southern route was opened. Corridor costs are lower than average (USD 4,160). Truck turn-around time is below average (14 days) but delays at border crossings and checkpoints are the highest among transit corridors (316 min). The corridor has a high number of controls (27) and above average levels of bribes at controls (XOF 40,000).

The Dakar port container terminal has been upgraded and has a 2015 projected capacity of 600,000 TEU. The port has had a Single Window since 2006.

Intraregional corridors

Bamako-Ouaga and Ouaga-Niamey: These corridors are part of the Trans-Sahelian Highway (TAH 5) from Dakar to N’djamena in Chad. The Bamako-Ouagadougou corridor is rather similar in performance to transit corridors. For the Ouaga-Niamey corridor we do not have much information but expect it to be similar to Bamako-Ouaga.

The Abidjan-Lagos corridor: is part of the Trans-Coast Highway from Dakar to Lagos. The Abidjan-Lagos corridor connects the major urban centres in West Africa – with a total combined population of 37 million. It carries much local cargo traffic, and international traffic is dominated by passenger traffic.

The average traffic count across borders on the Abidjan-Lagos corridor is 196 trucks per day, which is lower than the average transit corridors where 212 trucks pass per day. The busiest border crossing for cargo is between Ghana and Togo with 493 trucks per day, which is more than the busiest transit corridor, Cotonou-Niamey with 308 trucks per day. This might be due to clinker shipments being shipped from the Port of Lomé to a cement factory in Ghana close to border. The traffic survey this report relies on counted only 29 trucks per day at the Seme-Krake border crossing between Benin and Nigeria, which is surprising.

As for passenger traffic, the average Abidjan-Lagos border crossing sees some 7,500 people crossing per day whereas the average transit corridor only sees 2,100.

The Abidjan-Lagos corridor has a very high density of checkpoints with a total of 62 on a distance of less than 1,000 km. On average, a loaded truck must expect to spend 32 hours at a border crossing on this corridor, from a “best” of 7 hours at the border from Benin to Togo and a “worst” of 63 hours crossing from Nigeria to Benin.

There are currently two JBPs being built on the Abidjan-Lagos corridor: between Nigeria and Benin (Seme-Krake) and between Togo and Ghana (Noepe). It was announced in May 2015 that a third JBP would be built between Ghana and Côte d’Ivoire (Noe).

Review of corridor performance indicators

Corridor performance indicators detail the time and cost it takes to ship goods from a port to its final destination. They also specify the range of days this process can be expected to take, thereby including a measure of uncertainty – an important metric for economic operators. Currently, such data exists for 7 out of the 11 corridors reviewed.

Some general observations can be made with regard to the performance of these seven corridors:

• Total corridor logistics costs, road The average costs is USD 4.395 with the least expensive being Cotonou-Niamey at USD 3,938 and the most expensive being Abidjan-Ouaga at USD 5,095 with the difference between highest and lowest being about 30%. In reality the Lagos-Kano-Jibiya (LAKAJI) corridor, running from the south of Nigeria to the north of the country is probably the most expensive since our data includes neither a border crossing nor goods clearance for consumption in Niger. Elsewhere in the region these activities add from USD 300 to 1,200 per TEU.

• Corridor time The time required to move a consignment from arrival in port to clearance for consumption at destination is on average 16 days with a high of 19.7 for Cotonou-Niamey and a low of 11.6 days for Lomé-Ouagadougou. On average about 70 percent of this time is spent in ports and the inland terminals.

• Road travel time is on average 4.7 days for import, with the slowest being the LAKAJI corridor at 5.4 days and the quickest Dakar-Bamako at 4.1 days. The return trip is quicker – on average 3.1 days – because export is subjected to less control and many trucks are empty. For a distance of about 1,200 km, this is slow (about 32 km/h) but not totally unreasonable.

• Traffic All transit corridors are also important national corridors. National traffic is not reported and we have little information about it. However, a Traffic Study undertaken by JICA reported that among their survey points, Kumasi in South-Central Ghana, and Yamoussoukro in South-Central Côte d’Ivoire were the busiest in the region. The southern part of transit corridors are therefore much more congested than the transit and intraregional trade figures alone would suggest.

• Transit versus Intra-regional It appears that intraregional traffic is between 30-50% of total international traffic except maybe for Dakar-Bamako where 82% was reported to be intraregional traffic (not shown in the table). However, the source report for this figure counted vehicles for a period of only 4 days and may therefore not be representative.

• Truck turn-around time Is a serious problem with an average of 18 days, of which about 75 percent is spent waiting. The worst is Tema-Ouaga at 26 days while the “bests” are Abidjan-Bamako and Dakar-Bamako at 14 days.

• Controls Trucks are not stopped at every checkpoint but there may be more than one control at a checkpoint. The Observatoire des Pratiques Anormales (Observatory of abnormal practices, or OPA) is the most important source for road harassment data. The Abidjan Lagos Corridor Organization (ALCO) monitors checkpoints along the Abidjan-Lagos corridor but it does not report on how often a truck is stopped, how many controls it is subjected to, how much is paid and the delays this cause. At 54 checkpoints/ controls the LAKAJI corridor in Nigeria seems to be the corridor with the highest levels of controls and bribes. The corridor with least controls is Cotonou-Niamey with 11 controls for import, but that is somewhat misleading because trucks travel with military personnel in the truck through Benin, which prevents harassment. There is no military personnel presence on the return trip, which therefore has a higher level of corruption.

• Border crossing times An average border crossing time on a transit corridor is around 1.5 hours, whereas along the Abidjan-Lagos corridor the average is reported to be 32 hours. The difference may in reality not be quite as extreme as these numbers suggest. We know that less than 50% of the border crossing times on the Abidjan-Lagos corridor is processing time and on transit corridors much time is wasted waiting for convoys to take off.

• Delays at control points and at the border crossings on transit corridors amount to 240 minutes per voyage on average. This is 4 hours or about 10 percent of total travel time, assuming 8 hour driving per day.