Policy Recipe for Fostering Regional Integration through Transportation Development and Coordination in West Africa Mariama Deen-Swarray, Bamidele Adekunle & Gbadebo Olusegun Odularu Regional Policy Analyst, FARA; Policy Recipe for Fostering Regional Integration through Transportation Development and Coordination in West Africa CREPOL – ACRIA 3- Dakar, July 2012

Outline Introduction Some Stylized Facts & Literature Review Conclusion - Strengthening regional integration through transportation policy coordination.

Introduction Importance of fostering Regional Integration and Trade Role of Infrastructure - Transportation Development Study Objectives: To discuss the transportation modes in West Africa. To present policy options for optimizing transportation for regional integration in West Africa

Literature Review Positive relation between transportation investment and productivity growth Benefits of quality transportation- economic development, reduced trade & transaction costs etc. Common language and similar culture influence bilateral/regional trade patterns; Modern ICT-based economy - good access to efficient transportation infrastructure

Literature Review Continues Distance and high transport cost - challenge to (West) Africa’s competitiveness. Quality of infrastructure is positively related to trade volume and negatively to trade costs. Shipment from Nigeria to Liberia – a month rather than days. Improved infrastructure quality in domestic country can raise exports (14.5%) and imports (19.6%); higher in the case of the transit-country export increases (52%) - Grigoriou (2007).

Literature Review Continues Transport cost incidence for exports in SSA was 5 times more than the tariff cost incidence. Poor infrastructure accounts for 40% and 60% of transport costs for coastal and landlocked countries respectively. Lack of capacity at border posts, delays and lack of adequate transportation facilities inflate prices. Trend in infrastructure stock growth can be better explained by the political economy.

Literature Review Continues Major causes of poor state of infrastructure are mainly structural (low economic density and geography) - AfDB (1999). Review indicates that though there are varying views and findings, in general the availability and quality of transportation infrastructure promotes regional trade and economic growth.

Some Stylized Facts Cross-border infrastructure projects can be very costly. Lack of adequate financing for such projects Need for Alternative means of financing (PPP, Long-term) Lots of missing regional and trans-West African links Lack of existing road and rail links and the poor connectivity to ports within the region Countries in the sub-region mainly engage in the export of primary commodities

Some Stylized Facts On average, 45% of major roads within ECOWAS are in good condition (AICD, 2010). 7major corridors in ECOWAS are almost entirely paved; some are in bad condition; Corridors exclude Gambia, Sierra Leone, Liberia, Guinea Bissau and Guinea; Trade vol.:US$ 4 to US$ 20 bn (1993-2008); Nigeria and Cote D’Ivoire accounted for 23.2% and 28.8%; Cape Verde,the least - 0.1%. Nigeria and Cote D’Ivoire export more than they import; Others import more than they export

ECOWAS Countries Roads and their Condition – Source: AICD, 2010 Country Condition Type Good (%) Fair (%) Paved (%) Benin 35.8 1.8 96.8 Burkina Faso 58.2 33.6 100 Cape Verde Cote d’Ivoire 16.1 47.1 90.3 Gambia 89.4 47.4 Ghana 70.3 23.6 Guinea 22.2 20.7 89.1 Liberia 39.4 55.9 47.5 Mali 66.6 21.7 99.6 Niger 31.2 31 88 Nigeria 55.6 29.7 Senegal 39.8 15.1 99.8 Sierra Leone 19.5 58.4 Togo 49.7 ECOWAS 45.1 28.4 92.5

Inter-regional Comparison

Some Stylized Facts – Volume of ECOWAS Trade

Some Stylized Facts – Countries’ Shares in Total Trade

Country’s share of intra-regional exports and imports

Some Stylized Facts Container transport is growing - average annual growth rate of 13.8%; region contributes 1% and 2% to total global and Africa container traffic Inter-connections difficult and often expensive; Nigeria offers the most number of connections No central air transport hub; need for smaller jets Telecommunication costs are getting less expensive due to competition. Rail networks are the least developed 25 significant ports – none among the 70 largest in the world

Rail, Roads and Airports networks in ECOWAS

Main telephone line (Landlines) per 100 inhabitants

Cellular subscribers per 100 inhabitants

Internet users per 100 inhabitants

Rationale for a FARA FARA was created to: Enhance coordination of agric. research at continental level NASRO ASARECA CORAF/WECARD CCARDESA Advocate for investments & best practices and broker partnerships Mission - The creation of broad-based improvements in agricultural productivity, competitiveness & markets by strengthening the innovation capacity of Africa’s agricultural research and development systems AFAPP – African Food and Agric Policy Platform - to enhance the effectiveness of policy support to the African agriculture growth agenda.

Conclusion – Policy Recipe for Fostering Regional Integration through Transportation Development and Coordination in West Africa Regional integration and transportation policies should be systematically harmonised at national and regional levels. Reg transportation policies should be further strategically mainstreamed into regional integration plans so that transportation policies respond and adapt to the needs of regional integration policies and not the other way round.

Conclusion – Policy Recipe for Fostering Regional Integration through Transportation Development and Coordination in West Africa West African governments should ensure that transportation policy frameworks effectively promote the regional integration efforts. This could be achieved by: (i) providing incentives for transportation development initiatives that promote regional integration; (ii) strengthening relevant institutions for transportation development.

Conclusion – Policy Recipe for Fostering Regional Integration through Transportation Development and Coordination in West Africa Transportation policies should provide opportunities and alternatives to West African businesses and also promote the use of relevant institutions and tools (e.g. risk management instruments, ICT-based market information systems, et cetera.) that foster regional integration.

Conclusion – Policy Recipe for Fostering Regional Integration through Transportation Development and Coordination in West Africa Joint venture initiatives between public and private sector, such as public-private partnerships (PPP), should be supported in order to leverage transportation and regional integration programmes for regional development. Successful promotion and sustainable development of transportation sector in West Africa require strong policy and institutional support.

Thank you for the attention www.fara-africa.org