Byiers, B. 2017. Trade and food security in West Africa. ECDPM Talking Points Blog, 30 October 2017.
The West African economy is an informal economy. So trade facilitation is about working with informal trade.”
So stated Laurent Bossard, Director of the Sahel and West Africa Club (SWAC) at the Dutch Ministry of Foreign of Affairs in the Hague last week. Bossard’s comment came during the presentation of SWAC’s work on cross-border cooperation and policy networks in West Africa and on West African food markets. SWAC was joined by various Netherlands-based thinkers on regional trade, markets and agriculture to discuss issues that might inform a new multi-donor programme for trade facilitation in West Africa being prepared by the Dutch along with the European Union and the United States. This programme could be one of the first things the new Dutch government will work on.
Though anyone working on the region is acutely aware of the need to take account of informal and unrecorded trade, for governments and external partners to take informal economic activity as a starting point rather than wishing it away is an important, positive development. But it is only one step forward, given the challenge then faced in actually designing and implementing suitable support programmes. Does SWAC’s mapping of cross-border policy networks offer a way to inform where to focus attention and efforts?
One of the key objectives of the Dutch regional approach in West Africa is to facilitate trade, while taking account of, or ‘supporting’, informal traders and women especially. But taking the informal sector as a starting point presents a paradox: while trade facilitation programmes aim to reduce barriers to cross-border trade – through improved border clearance procedures, one-stop border posts, and improved transport logistics along corridors – such barriers are often a key source of livelihoods for those living and operating at borders, whether traders or officials. Indeed, some people make their living from price differences for the same good across borders, and others from payments to navigate border bureaucracy. Furthermore, border agents who boost their salary through bribes can also resist efficiency-boosting reforms, making an indomitable coalition against change.
So, while accepting informality as a core characteristic is important, promoting trade needs to find a balance between allowing for informality and helping to protect those engaged, while also seeking efficiency gains to improve trade flows across and around borders. Essentially, this raises the question of what accompanying policies are required to provide wider employment and income opportunities for all those currently living off trade barriers – so focusing on ‘non-trade’ issues to improve trade facilitation.
The SWAC report potentially offers some entry points (as well as beautiful maps). It highlights areas of potential for ‘cross-border cooperation’, based on shared resources, nearby populations and other underlying factors. It uses social network analysis to map out information-sharing networks between people working on cross-border policy, allowing one to see who is talking to whom on cross-border policy issues. Such analysis shows, for example, the centrality of certain ECOWAS staff in parts of the network, as one might expect for a regional economic commission, as well as some donor figures – such as the German development agency (GIZ).
Perhaps more importantly, the study seems to show the links between top-down, institutional, regional integration, and policy actors engaged in the day-to-day work of cross-border trade. In doing so it highlights the links between regional and local actors, which is crucial for regional decisions to take account of local realities, such as informal trade, and understand implementation challenges. The report presents the fascinating statistic that more than half of the 2000 local authorities in member countries of the West African Economic and Monetary Union (UEMOA) are in border areas and so are, by definition, engaged in regional policies with local practice.
However, there is one potential problem if informality is as important as it seems. By basing the network analysis on people who work on cross-border cooperation policies, the focus is on individuals operating in the ‘formal’ policy apparatus for whom informal cross-border trade is rarely a key issue. Further, working with ‘policy networks’ may then simply mean engaging with those who potentially benefit from the status quo rather than those who would trade and invest more if border-crossing problems were reduced and therefore might offer an alternative approach to addressing cross-border challenges. Since SWAC-related researchers have done previous work on informal cross-border trade networks, maybe the real interest is in where these two sets of networks meet.
Finally, the SWAC team also presented some findings on the food economy. Their statistics show that 92% of the regional food economy in West Africa is domestic (based on household data on production and consumption) – so only 8% of the regional food consumption is imported from outside the region. Of course, there are some sectors where imports are higher than others, with rice as an example, but this suggests high potential gains from a more integrated regional market.
That points to the need to look at the nature of specific sectors since different value chains are subject to very different underlying political economy dynamics. Whereas rice is often seen as a national concern with the result that state-business relations around rice are quite murky, with traders often closely aligned to political actors, other value chains such as livestock, while also extremely complex, have an underlying cross-border value chain logic, with cattle generally reared in the Sahelian region, and consumption markets along the coast.
This brings the discussion back to trade facilitation and informality (much of the livestock market is informal, building on pastoral forms of production, etc.), but production of dairy or meat, requires standards, and informal producers generally cannot meet such standards. If regional development aspirations need to build on trade and regional value chains, and processors and consumers require at least a degree of safety in products consumed, standards will be key.
So, what to make of all that? Starting from accepting informality may nonetheless simply imply a need to create jobs in other sectors, with support to small-scale producers and traders to meet realistic standards. But, at the same time, perhaps the key message is that if “the economy is informal”, more focus on the interaction between informal practices and regional policies will be where progress can most be made.
The views expressed here are those of the author and not necessarily those of ECDPM.