Economic Community of West African States (ECOWAS)
Sierra Leone, as a founding member of the Economic Community of West African States (ECOWAS) has embraced regional integration. It was the first member outside of the West African Economic and Monetary Union (WAEMU) to adopt the Common External Tariff (CET), which is based on the WAEMU tariff. Sierra Leone is gradually aligning its tariff lines with those under the CET. Once fully implemented, the average tariff will fall from 16.9% to 13.3%. With the adoption of five bands of tariff rates (0% to 30%),80 Sierra Leone is achieving an important improvement in the levels and simplicity of its tariff structure.
While member states should implement the CET in full, each country has the option to identify a few products for which they can change the tariff rate currently assigned under the CET. Sierra Leone has proposed one change: on the tariff for rice, wishing to raise it from 15% to 18%. This is an acknowledgement of the sensitivity of rice as a staple and the implications for increased competition under the EPA.
With the CET now taking over the ECOWAS trade liberalisation scheme (ETLS) as West Africa moves towards a customs union, the aim is to deepen intra-regional trade. However, the experience on the implementation of the CET among West African countries is patchy, mainly due to concerns over loss of customs revenue. Thus, trade in primary products is still not free in the sub-region. Various countries place unofficial barriers on trade usually for food security reasons. Indeed concern is often expressed in Sierra Leone over the prevalence of cross-border trade in some food products, especially rice and palm oil, the export of which has recently been reinstated. Not only is this inconsistent with intra-regional trade, it is contrary to the expressed aspirations of government policy to promote private sector development. Cross border trade (to Guinea or Liberia) usually means better prices for Sierra Leonean farmers and hence higher incomes. It may also mean greater incentives for them to expand production or to add value to agricultural products.
ECOWAS Heads of State and Government adopted a new Vision 2020 in June 2007 and instructed the ECOWAS Commission to produce a Community Development Programme to buttress this vision which is the transition from a Community of ECOWAS states to ECOWAS people. The ECOWAS Commission has adopted a common regional agricultural policy (ECOWAP) with an action plan for implementation.81 The ECOWAP vision is “a modern and sustainable agriculture based on effective and efficient family farms and the promotion of agricultural enterprises through the involvement of the private sector”. The three major themes of the regional agricultural policy are:
Increasing the productivity and competitiveness of West African agriculture
Adapting the trade regime vis-à-vis countries outside the region
The first axis of intervention focuses on improving food security, increasing producer incomes and recognising their status, and reducing poverty. The second and third axes aim to facilitate access to regional and international markets to dispose of the increased volume of produce generated by the modernisation of the region’s production systems.
A first group of eight countries is implementing the regional action plan for the implementation of ECOWAP. Sierra Leone is not among this group, but together with the remaining seven countries will start working on national assessments and modelling investments. In the context of the implementation programme, emergency actions have been taken to ensure that agricultural issues are taken into account by the CET, and plans to liberalise trade with the EU within the framework of the Economic Partnership Agreement (products likely to be excluded from liberalisation). ECOWAP could provide Sierra Leone with an opportunity for expanded sub-regional trade and technical assistance for trade facilitation in this regard.
The Economic Partnership Agreement
Under the auspices of ECOWAS, Sierra Leone is negotiating an Economic Partnership Agreement (EPA) with the European Union (EU). Negotiations cover a broad range of trade and trade-related policies beyond the mere reduction of tariffs. Effectively, Sierra Leone and other ECOWAS countries will have to offer duty free access to most imports from the EU. This will have a significant effect not merely on government revenue through tariffs, but also have important impacts on domestic producers including farmers and industries, which over time will have to compete with increased EU imports. The EPAs are designed to bring the arrangement that the EU has with about 70 African, Caribbean and Pacific (ACP) countries into conformity with the WTO.82
Given that Sierra Leone is already a beneficiary of the EBA initiative, which accords duty and quota free market access, the EPA is only likely to provide the country with new market access if the EPA is carefully designed. Market access can only be improved with the relaxing of restrictive rules of origin, the development of supply capacity and the deepening of regional integration among ECOWAS countries. Sierra Leone has not been participating effectively in the EPA negotiations, and it needs to give a more concerted effort to these negotiations which have the potential to have a more immediate and lasting impact on its economy than even the Doha Round. The irony is that without specific attention to the regional integration element, the EPA may result in the ECOWAS countries giving the EU better access to their markets than they provide for each other. The ECOWAP and the EPA are therefore important components of Sierra Leone’s plan to develop agriculture further.
As a first step in its EPA preparations, Sierra Leone has developed a list of sensitive products which include rice and palm oil, which may be exempted from liberalisation schedules under the EPA. However, Sierra Leone needs to examine the opportunities presented by the EPA for agricultural development and export. In particular, Sierra Leone should consider which agricultural products could be developed for regional trade and focus attention on all the aspects of trade facilitation to encourage exports in this regard.