West African cross-border trade: trends & opportunities
Bio Soulé, a Rural Hub programme officer, explores the obstacles that prevent the promise of cross-border trade from fully catalysing the region’s growth and development in this article for the Bridges Africa series. Intra-community trade is still struggling to take off and much of it is not recorded in official statistics. Between 60-80% of the petrol sold in Benin, for example, has been smuggled in from Nigeria. More than 10% of Côte d'Ivoire’s cocoa beans are sold in Ghana, where prices are more attractive. Many barriers hinder the development of legal intra-community trade within the ECOWAS zone. One explanation put forward by Soulé is that the region is too open to the international market. Despite the creation of a fifth tariff band, which set customs duties at 35% for 130 agrifood products in the common external tariff (CET) area, West Africa has one of the lowest protection rates overall for domestic products. The low added value of these products, which circulate as raw materials or semi-processed products, is a second factor that impedes the development of intra-regional trade. There is a significant gap between the strong and growing regional demand and the supply. This has led to entire market segments being supplied by imports from the international market. “If radical reforms are not carried out in these countries, the African market could become easy prey for multinationals and counterfeit traders, who have the capacity to flood it with products of all kinds,” exhorts Soulé.