Donor coordination and transport in West Africa - towards people, partnership and prosperity?

Trade facilitation can seem a somewhat mundane topic - it’s mostly about procedures and logistics after all. But once you grasp the importance of transport costs and bottlenecks in a region like West Africa, what drives those costs and the political implications of reforms become pretty interesting. In East Africa, the Central and Northern Corridors connect the ports of Dar es Salaam and Mombasa to Uganda, Rwanda and Burundi, as well as Eastern DRC, South Sudan and the hinterlands of Kenya and Tanzania. Increasingly, transport corridors are also very much part of the Southern African Development Community (SADC) architecture, with the Walvis Bay Corridor, while the Maputo Development Corridor was arguably the first to take this approach of combining hardware investments in infrastructure with ‘software’ and procedural improvements to facilitate trade and encourage wider investment and development. West Africa is not to be left behind, with a recent workshop in Abidjan, Côte d’Ivoire about moving “Towards a more coordinated approach to corridor development in West Africa” and a further donor meeting on how to improve their coordination around trade facilitation in Accra last week. In the swirl of thoughts and debates following those discussions, four key points keep coming back that might help shape further progress in ECDPM work and beyond:

1. Politics are all around us

Any reform or intervention by policy-makers creates winners and losers - and working regionally creates winners and losers both within and between countries. That can be important in shaping the willingness of countries, public agencies and individuals to implement regional commitments (see our PERIA dossier, for example). In some respects, focusing on transport corridors is already a response to this complexity. Spatial concentration - as in developmental corridors or special economic zones -  allows policymakers to focus on a narrower area and group of actors, allowing reforms to be piloted before spreading more widely in the economy. But the politics doesn’t stop there - far from being technical fixes, setting up a one-stop border post or reforming port operations are very much about understanding actors, agency, rent-seeking, and resistance to change, before then identifying opportunities for change. Within each context, these actors and factors differ. So the issues faced in setting up a one-stop border post (OSBP) in one place do not necessarily arise in the same way in another place. A further complicating factor is that regional commitments to remove non-tariff barriers, for example, are constantly under threat from political pressure to raise barriers to trade to protect local production. Promoting investment in specific areas in and around corridors face similar challenges. These imply a need for regional reformers or their external supporters to depart from ‘best-practice’ approaches towards ‘best fit’. This way of thinking and working politically underpins the ECDPM political economy analysis of the ports and transport sector that we presented at the AfDB workshop. The analysis highlights the way that actual and perceived risks in the region have shaped the strategies of port investors and hinterland governments in securing access to cargo by diversifying across ports, while maintaining rules for whose transporters carries what cargo. Transport along the corridors from Abidjan, Tema and Lomé to Ouagadougou is tied up in a range of formal and informal agreements and bargains between small and large scale operators, hinterland and coastal country transporters, as well as unions and shippers councils. Reforms to promote efficiency seem likely to face resistance unless they can somehow take account of these different interests and power relations.

2. A special purpose vehicle to navigate the politics?

The need for support to regional trade facilitation to be politically opportunistic was also underlined in Abidjan by participants from TradeMark East Africa (TMEA) - a special purpose entity set up in East Africa in 2011 to pool donor funds and channel these towards trade facilitation interventions at member state level. TMEA’s experiences in East Africa and discussion of a study tour of West Africans to TMEA also highlighted the potential value of its model in navigating some of the hurdles that commonly slow down implementation of regional commitments. As a non-profit private company with offices in all EAC member states, TMEA is able to lower transaction costs and duplication of projects by pooling donor funds, while being a company allows it to look beyond project time-horizons and pick and choose when and where to intervene. Photo Courtesy of jbdodane via Flickr.  That seems to offer agility and flexible in how it engages - a key attribute in such a political area, and something that donors are only rarely praised for. Their independence from direct donor control potentially also creates the necessary space to experiment and perhaps even to fail - even if their own incentives might not encourage that! This of course raises questions about its applicability in West Africa. To what degree can TMEA serve as inspiration to a West African model? Would such a West African structure help coordinate donors and policymakers around the Abidjan-Lagos and other corridor initiatives? Is there enough buy-in from West African policy-makers and indeed from donors, other economic and civil society actors in the region to coordinate their efforts enough to make that work? That remains to be seen, but the potential seems to be there.

3. Making trade easier for whom?

Once you are in a room with trade and transport enthusiasts, it is tempting to get carried away with discussions about the transit times from Ouagadougou to Abidjan versus Tema, or how to reduce border crossing times at Cinkasse. But that can easily ignore the huge levels of small-scale, cross-border informal activity, raising lots of difficult questions about what that means for trade facilitation. Lest people get the false impression that informal cross-border trade is only about individual farmers and women simply seeking a market, research for ATWA on cross-border activity at three different borders by Bureau Issala highlighted the wide array of products being carried at different borders (i.e. not just agricultural produce), the intricate systems linking public and private actors, the linkages between large and small scale operations, and the links between formal and informal activities - that makes dealing with ‘informal trade’ kind of tricky. At the same time, a recent ODI study looking at OSBPs in East Africa (actually commissioned by TMEA) suggests that it had little if any impact on informal traders, with corruption increasing in some cases. That does raise the need for trade facilitation mechanisms to not only think in terms of bringing down trade costs for large companies, but also to address issues affecting small-scale traders. Some ideas discussed related to relatively straightforward ideas like building markets with sanitary facilities; stationing individuals at borders who are able to inform people of their rights and the trade laws affecting their transaction. Yet, the broad message seems to be that this remains a ‘wicked hard problem’ to address.

4. Trade facilitation: transformation not transit

This all then points to a wider point: trade facilitation is a means, not an end. That is, lowering the time and cost of shipping goods across borders is important not in and for itself, but for the impact it has on producers and consumers. In a region that includes small markets, the economic argument is that lowering trading costs has the potential for greater economies of scale and specialisation, thereby encouraging investment and boosting intra-African trade. Photo Courtesy of Transaid via Flickr. But reforms to improve both the hardware and software along transport corridors are often focused on international trade - especially imports. While that is beneficial to consumers and input-reliant producers, tensions arise where this undermines local producers or infant industries. Promoting economic transformation therefore needs trade facilitation to combine with investments and linkages along corridors - something that is being attempted in East Africa under the SAGCOT initiative, for example. While not without its own challenges, this more spatial or territorial approach appears to be a necessary complement to trade facilitation measures.

Cui bono?

While none of this is easy, each of the above points brings us back to the nexus of regional versus national politics and the question: cui bono? In whose interest is it really to lower transport costs along major corridors? And who captures the gains? Unless that is well understood, different interventions and models run the risk of frustration or irrelevance, far worse than the risk of being mundane.     The views expressed here are those of the author and not necessarily those of ECDPM.