MARKET INTEGRATION PROGRAMME

The Market Integration Programme has achieved remarkable programme in the following areas :

• Free Movement of Persons

• Abolition of visas and entry permits

• Introduction of the ECOWAS Travel Certificate

• Introduction of harmonised immigration and emigration forms

• Establishment of national committees to monitor ECOWAS programmes on free movement of persons and vehicles

• Introduction of the Brown Card Motor Vehicle Insurance Scheme

• Free Movement of Goods

• Printing and introduction of the harmonised customs documents

• Removal of tariff barriers under the trade liberalisation scheme (TLS)

• Establishment of an ECOWAS common external tariff

• Removal of all non-tariff barriers of a monetary nature

• Launch of the ECOWAS travellers cheque

• Settlement of Arrears to the West African Clearing House (WACH)

• Common currency and harmonisation of economic and financial policies

Free Movement of Persons

The protocol on free movement of persons signed by the Authority of Heads of State and Government includes the abolition of the visa and entry permit, right of residence and right of establishment.

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Abolition of visas and entry permits

All ECOWAS citizens, excluding those defined by law as undesirable aliens, may enter without a visa and reside in any Member State for a maximum of ninety (90) days. The only requirement for ECOWAS citizens is a valid travel document and international vaccination certificates.

.The visa and entry permit requirement has been abolished in all ECOWAS Member States. However, nearly all the States still maintain numerous check-points, and ECOWAS citizens are subjected to administrative harassment and extortion.

Concerning the right of residence and settlement, most Member States respect the provisions of the protocol. A detailed assessment is in progress.

Table: checkpoint along some West African Highways

Source: ECOWAS Executive Secretariat

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Introduction of the ECOWAS Travel Certificate

The Authority of Heads of State and Government has established a travel certificate for ECOWAS Member States to facilitate and simplify the formalities for cross-border movement. ECOWAS citizens holding a travel certificate or passport are exempted from filling out immigration and emigration forms in ECOWAS Member States. The ECOWAS travel certificate has entered into circulation in Burkina Faso, Gambia, Ghana, Guinea, Niger, Nigeria, Sierra Leone. However, the certificates as currently printed differ in colour, format and quality; while high printing costs are a prohibiting factor for some Member States.

The Executive Secretariat has requested financial assistance from a number of donors for the printing of the certificates . The ECOWAS travel certificate should evolve, in the long term, into the ECOWAS international passport, similar to the passport used by countries in the European Union

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Introduction of harmonised immigration and emigration forms

The harmonised form measures 15 x 9 cm and comprises several leaflets. It is to be used by ECOWAS nationals only in exceptional cases. As a rule, ECOWAS nationals travelling with their national passports or the ECOWAS travel certificate may have these documents stamped without filling out any forms. As far as the Secretariat is aware, no Member State has introduced these forms to date. As a result, ECOWAS nationals holding perfectly valid documents continue to fill out immigration and emigration forms. This leads to enormous waste of time at borders. Member States would appear to be unaware that the form exists, despite its having been widely distributed. The Executive Secretariat will convene a special meeting of ECOWAS Ministers of Internal Affairs and State Security, to study problems encountered in efforts to introduce the ECOWAS travel certificate and the harmonised immigration and emigration form, and to discuss other problems posed to the ECOWAS immigration programme.

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Establishment of national committees to monitor ECOWAS programmes on free movement of persons and vehicles

Within the context of efforts at ensuring free movement of goods and persons and improving the road transport system, the Authority of Heads of State and Government adopted a decision calling for national committees to be established, to monitor implementation of ECOWAS decisions and protocols on free movement of persons and vehicles.

Each national committee shall be composed as follows:

Director of road transport :                                                       Chairman

Director of road safety :                                                            member

A representative from the police force                                        member

A representative from the national bureau:                                  member

A representative of the National

Bureau of the ECOWAS Brown Card:                                        member

A representative from the Presidency:                                        member

A representative from the Department of Customs :                     member

A representative of the road transporters union:                           member

A representative of the ECOWAS national unit:                           member

So far, this decision has been implemented by the following Member States which have set up their committees: Benin, Burkina Faso, Ghana, Guinea, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

19.Clearly, however, given the numerous obstacles to the free movement of persons and goods in Member States, the monitoring committees have failed in their set objectives. Member States must take necessary action to set up these committees and to render them more effective. To be effective, each committee should, ideally, meet once every quarter. Member States should evaluate the national monitoring committees and send quarterly reports of their different meetings to the Secretariat, in order to give the latter a clearer picture of the implementation status of the programme on free movement of persons and goods.

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Introduction of the Brown Card Motor Vehicle Insurance Scheme

The ECOWAS Brown Card motor vehicle insurance scheme was introduced as an accompanying measure to the programmes on free movement of persons and goods, and the transport programme. Twelve countries currently apply the scheme: Benin, Burkina Faso, Côte d’Ivoire, Ghana, Guinea, Guinea Bissau, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. It should be noted that two motor vehicle insurance systems coexist within the sub-region: the ECOWAS Brown Card and the CIMA code. The two systems should be harmonised.

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Free Movement of Goods

The objective of the ECOWAS Trade Liberalisation Scheme is to establish a customs union among the Member States of the Community over a period of fifteen (15) years, starting from 1st January, 1990, the date on which the scheme entered into force. The union will involve total elimination of customs duties and taxes having equivalent effect, removal of non-tariff barriers, and establishment of a common external tariff (CET).

• - Liberalisation of trade in unprocessed goods and traditional handicraft products

Unprocessed goods and traditional handicraft products should circulate freely between Member States, exempt from duties and taxes having equivalent effect, and not subject to any quantitative or administrative restrictions.

.In order to qualify for exemption as described above, such unprocessed goods and traditional handicraft products must satisfy the following conditions:

• - originate in Member States;

• - appear on the list of products annexed to the decisions liberalising trade in such   products; and

• - be accompanied by a certificate of origin and an ECOWAS export declaration.

• -Liberalisation of trade in industrial products

Customs duties and taxes having equivalent effect shall be reduced gradually over a period of ten (10) years, starting from 1st January, 1990, until they are totally eliminated. The removal of non-tariff barriers to the importation of such goods is also envisaged. In order to benefit from the scheme, industrial products must satisfy the following conditions:

• - must originate from Member States;

• - must be approved;

• - must be accompanied by a certificate of origin and an ECOWAS export declaration.

Below is an appraisal of the ECOWAS trade liberalisation scheme at the present time:

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Printing and introduction of the harmonised customs documents

As part of the TLS support measures, uniform customs and statistical instruments: the certificate of origin, the customs and statistical nomenclature, and the customs declaration, have been produced. In addition, a protocol on Inter-State Road Transit (ISRT) and a transit guarantee mechanism have been adopted.

A draft single customs document was prepared in collaboration with UEMOA and submitted to the thirty-ninth meeting of the TCIMP Commission held in Abuja from 17 to 19 May 1999 for consideration. The Commission endorsed the document and recommended it to the Council of Ministers for adoption. The document will replace the many different customs declaration forms in use in the Member States, thereby facilitating and speeding customs clearance procedure and, as a result, reducing time spent at customs posts. Furthermore, the adoption of a single document will make possible streamlining of codes and other statistical or regulatory data and facilitate the compilation of accurate external trade figures for ECOWAS Member States.

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Removal of tariff barriers under the trade liberalisation scheme (TLS)

-Eight countries: Benin, Burkina Faso, Côte d’Ivoire, Gambia, Ghana, Guinea, Mali, Niger, Nigeria, Senegal ,Sierra Leone and Togo have lifted tariff barriers in respect of unprocessed products under the TLS. However, only Benin has removed tariff barriers to trade in industrial products.

With respect to the estimated compensation budget for loss of revenue incurred by Member States through the liberalisation of intra-ECOWAS trade, only Benin, which is implementing the TLS, has submitted an application for compensation. Burkina Faso, The Gambia and Mali have paid up their contributions in full while Benin and Nigeria have made part payments.

Despite the many problems associated with the trade liberalisation scheme, Benin has accepted to apply the provisions to approved goods imported from Ghana, Nigeria and Togo. Benin deserves to be commended for its pioneering role in the implementation of the scheme.

.Generally speaking, the trade liberalisation scheme is not yet operational. This state of affairs, one of the main weaknesses of ECOWAS, is due mainly to the fact that some Member States have failed to print the harmonised documents and have not yet removed tariff barriers . Other contributory factors are the high cost of compensation, the fact that the ECOWAS TLS and the UEMOA scheme coexist, and the absence of measures to enlighten economic operators about the ECOWAS Trade Liberalisation Scheme. The Executive Secretariat has carried out an evaluation of the scheme, and proposed solutions which were presented to the Council of Ministers and the mini-summit of Heads of State and Government of seven (7) ECOWAS countries held from 26 to 27 March 2000 in Abuja. The Heads of State and Government accepted the principle of converting the community levy into a solidarity fund to be placed at the disposal of all the countries to finance the compensation budget for customs revenue losses due to trade liberalisation. Moreover, in order to reduce the amounts to be compensated for Member States which had not yet reduced their customs duties were called upon to do so.

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Establishment of an ECOWAS common external tariff

Under the trade liberalisation scheme, 31 December 1999 signals an end to tariff barriers within an ECOWAS free trade zone. The next phase thereafter is the establishment of an ECOWAS common external tariff (CET) within a period of two years.

The Executive Secretariat will pursue its efforts in this direction in collaboration with UEMOA, in order to avoid duplication at the regional level and complications arising from harmonisation after the event. Activities in this connection will be financed by the European Union within the framework of its Regional Indicative Programme (RIP).

Member States are urged to lend every necessary assistance to the Executive Secretariat in setting up a customs union in the West African region.

3.Monetary Cooperation Programme

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Removal of all non-tariff barriers of a monetary nature

.The ECOWAS monetary cooperation programme is intended to achieve, in the medium-term and long terms, the convertibility of West African currencies and the creation of a single ECOWAS currency. The adjustments made to currency exchange rate under the structural adjustment programmes have contributed enormously to promote exchange rate equilibrium, thereby facilitating the convertibility of the current account operations of most Member States. The Community authorities have appealed to all Member States to remove, in the short-term, all non-tariff barriers of a monetary nature. To this end, they have recommended that Community citizens be allowed to use local currencies for payment of airport taxes and hotel bills, and to purchase air tickets.

The following twelve countries have removed all non-tariff barriers of a monetary nature: Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Guinea, Guinea-Bissau, Mali, Niger, Nigeria, Senegal and Togo. Ghana demands only the payment of road transit tax in foreign exchange. The other three Member States still require that non-residents purchase air tickets and pay airport taxes, etc. in foreign currency. These countries must remove these barriers

The ECOWAS Executive Secretariat and WAMA have, with the assistance of OAU-PASU/EDECO, carried out a study on regional convertibility of national currencies in order to facilitate their use in trade and payments within the region. The result of the study was presented to a meeting of Central Bank officials in Abuja in June 1999. The meeting has made appropriate recommendations to the meeting of Governors scheduled to take place in December 1999.

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Launch of the ECOWAS travellers cheque

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The ECOWAS travellers’ cheque, was officially launched on 30 October 1998 during the 21st Summit. This instrument which was sponsored by the Committee of Governors of Central Banks and is to be managed initially by the West African Monetary Agency (WAMA), will facilitate intra-regional trade and payments transactions. The Committee of Governors has therefore decided to put the cheques into circulation on 1 July 1999. A mid-way evaluation has been carried out early in December 1999 in Lome. It was planned that the quality of cheques should be improved to make them more attractive.

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Settlement of Arrears to the West African Clearing House (WACH)

One of the objectives assigned to WACH at its creation was to promote the use of local currencies for business transactions in West Africa. The organisation has since been transformed into the West African Monetary Agency (WAMA), an ECOWAS agency responsible for conducting the ECOWAS monetary policy. Guinea Bissau and Liberia are still owing UA 7.6 million and UA 5.7 million respectively to WACH in arrears.

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Common currency and harmonisation of economic and financial policies

In order to reflect the wish to harmonise ECOWAS economic policies within the framework of the objectives of the revised Treaty and to accelerate the creation of an ECOWAS monetary zone, the Council of Ministers, on the proposal of the Consultative Forum of Ministers of Finance, Ministers of Planning and Governors of Central Banks, spelt out in 1997 some objectives regarding convergence indicators.

Annual assessments showed that these criteria did not meet the requirements for a credible economic and monetary union. Consequently, the Council of Ministers, at its forty-third session in Abuja in October 1998 requested the Executive Secretariat and WAMA to validate the selections and to adjust and expand the convergence indicators.

The Executive Secretariat duly made recommendations in this regard to the joint meeting of Directors of Research of Central Banks and representatives of Ministries of Finance and to the Governors of Central Banks. The Council of Ministers at its session held in Lome in December 1999, made proposals to the Authority of Heads of State and Government in December 1999 in Lome which decided the following:

. The set of convergence criteria which will be closely monitored within the framework of the monetary cooperation programme has been expanded as follows:

Member States should adhere strictly to the following four (4) criteria which have been chosen for their usefulness in the assessment of the degree of macroeconomic stability attained and, particularly, for the achievement of the internal and external balance of the economies of Members States. These will render the proposed single currency more viable:

• ratio of budget deficit (excluding grants) to GDP: it will be calculated on the basis of commitment sand should be lower than 4 % by the year 2002;

• inflation rate: 5 % by 2003;

• Central bank financing of budget deficit: 10 % of previous year's tax revenue. Member States to comply by 2003;

• gross reserves: gross external reserves should represent not less than six months of imports by 2003.

Secondary criteria

 Member States should also adhere to the secondary criteria which are designed to sustain the primary criteria and facilitate achievement of the convergence targets. They may be selected as follows :

• prohibition of new domestic arrears and liquidation of all existing arrears;

• tax revenue/GDP ratio equal to or more than 20 %;

• wage bill/tax revenue equal to or less than 35 %;

• real exchange rate stability;

• interest rates: countries must maintain positive real interest rates;

• public capital expenditure/taxe revenue ratio: equal to or more than 20%.

 The macro-economic policy convergence exercise may be conducted over the period from 1999 to 2003. The member States will be required to formulate pluri-annual convergence programmes and submit performance report every six (6) months. Defaulting States will be liable to sanctions.

 If the convergence exercise is successful, the single monetary zone will be launched on 1st January 2004.

The multilateral surveillance mechanism policies for the harmonisation of macroeconomic policies comprises the following organs:

- The Convergence Council which is composed of Ministers of Finance and Governors of Central Banks of Member countries will monitor policies and macroeconomic performance;

-The Technical Monitoring committee comprises the Directors of Research of the Central Banks and Senior Ministry of Finance officials. The major responsibility of the Committee will be the preparation of six monthly reports on multilateral surveillance for submission to the Convergence Council;

- The West African Monetary Agency and the ECOWAS Executive Secretariat will ensure the compatibility of all the multinational convergence programmes formulated by the States;

-The national Coordinating committees functions for the collection and processing of data provided by Member States.

 A meeting could soon be convened between senior officials from the Ministries of Justice, Legal advisers from the Central Banks and the ECOWAS Executive Secretariat. The meeting will be responsible for the formulation of a draft protocol on the legal framework for a multilateral surveillance mechanism for economic policies based on the guidelines indicated above.

Harmonisation of the methodology for the preparation of macroeconomic aggregates for the monitoring of the convergence exercise

 Council reiterated the importance of harmonising methodology in use in the Member States for the preparation of the macro-economic aggregates in use in the Member States. Harmonisation of these aggregates will boost the credibility of the multilateral surveillance mechanism and enhance the economic and financial performance of the States. It was therefore agreed to constitute a working group comprising the Directors of Research of the Central Banks, WAMA, the ECOWAS Executive Secretariat, senior officials of the Ministeries of Finance, of national offices of statistics and AFRISTAT - the economic and statistical observatory in Africa. The working group will be required to put forward concrete proposals on the means to achieve the compatibility of macroeconomic aggregates in the region within the shortest possible time.

 Appropriate terms of reference will be drawn up by the working group and the international community will be approached to enhance the capacities of the national offices of statistics and accelerate the attainment of the fundamental objective of comparability of aggregates within the framework of the multilateral surveillance of macroeconomic policies and performance.

In order to create a single ECOWAS monetary zone, the following non UEMOA member countries, Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone decided to create a second monetary zone by the year 2003 which will merge up with the UEMOA zone in 2004 to give rise to a single ECOWAS monetary zone.

Enlightenment of economic operators and the public on the ECOWAS priority programmes

The attainment of ECOWAS objectives and the concretisation of the political commitment of Member States demand support for the regional integration programmes at the grassroots level; hence, the need to involve the citizens and economic operators in the regional integration process. This can only be possible when the actors in the development effort are made aware of the regional integration programmes through the following actions:

1. education on the benefits of the priority programmes through the organisation of seminars on the integration process;

2. launching of publicity campaigns, particularly in the media, to enlighten the public on integration;

3. provision of billboards at the borders and at other places, to remind Community citizens of their rights and obligations within the framework of free movement of persons.

Member States have neither made sustained efforts nor committed the necessary resources to implement programmes designed to publicise the Community. Only six Member States - Benin, Burkina Faso, Ghana, Guinea, Guinea Bissau and Senegal - broadcast the programme «ECOWAS Hour», and submitted reports on economic integration.

Member States should take the measures required to create awareness of ECOWAS programmes among economic operators and the public. Such measures include the organisation, regularly, of seminars or workshops to highlight the benefits stakeholders in development stand to derive from integration. Publicity campaigns should also be conducted constantly to educate the public. The Information Department of the Executive Secretariat should be fully involved in such activities.

Accompanying Measures

The markets integration programme thus sketched out was accompanied by a trade co-operation programme built around the automated system of customs data (ASYCUDA) to improve the customs revenue of the EUROTRACE software for compiling trade data in business opportunities management computer system (SIGOA/TOPs) within the framework of buyer and vendor meetings. Furthermore, ECOWAS organised two trade fairs, in Dakar in 1995 and in Accra in 1999. It should also be pointed out that ECOWAS Fund is a majority shareholder in the regional Commercial Bank, ECOBANK, which has branches in eleven (11) countries.

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