Chapter

IV Trade Patterns in the Community

Author(s):
Saleh Nsouli, John McLenaghan, and Klaus-Walter Riechel
Published Date:
August 1982
Share
  • ShareShare
Show Summary Details

Direction of Intraregional Recorded Trade

Table 7 shows that the level of exports and imports and the relative importance of the member countries of the Community in regional trade vary widely. By far the largest importer and exporter in the region is Nigeria. The data available at the time the paper was prepared (1977 for most countries; 1976 and 1978 for a few countries) indicate that Nigeria accounted for about two thirds of both the total imports and exports of the region. By contrast, Cape Verde accounted for about 0.01 per cent of total exports and about 0.26 per cent of total imports. Between these two extremes, most member countries have exports and imports ranging between 1 and 3 per cent of total exports and imports, respectively. Ivory Coast was second only to Nigeria, accounting for over 15 and over 10 per cent of total exports and imports, respectively. Ghana’s exports and imports accounted for about 6 per cent and 5 per cent of the respective totals. Senegal’s exports and imports were slightly above 4 per cent.

Table 7.ECOWAS: Trade Patterns 1(In per cent)
Share of

Exports to

Other ECOWAS

Countries in

Total Exports
Share of

Exports in

Regional

Total
Share of

Imports from

Other ECOWAS

Countries in

Total Imports
Share of

Imports in

Regional

Total
Benin3.880.693.881.48
Cape Verde10.910.010.900.26
Gambia, The2.410.259.100.45
Ghana1.656.0311.714.65
Guinea0.202.000.701.45
Guinea-Bissau1.000.081.420.21
Ivory Coast4.3615.391.8710.70
Liberia1.782.782.582.57
Mali9.650.6127.390.65
Mauritania1.014.901.73
Niger0.951.0014.390.93
Nigeria1.8162.0620.4366.73
Senegal16.834.267.234.40
Sierra Leone3.100.9131.740.92
Togo3.411.543.342.32
Upper Volta1.591.3916.390.55
ECOWAS average2.87100.02.58100.0
ECOWAS average, excluding Nigeria34.627.54
Sources: Data provided by the national authorities; IMF, Direction of Trade; and Fund staff estimates. Export data were extrapolated from estimates of partners’ import data. As data from differing sources do not always coincide, they should be regarded as illustrative.

Data for Benin, Ivory Coast, Nigeria, and Togo refer to 1978; for Niger, 1976 data were used; for other countries, 1977 data were used.

Petroleum exports account for nearly 91 per cent of the total.

Excludes Nigeria’s exports to the region and its imports from the region.

Sources: Data provided by the national authorities; IMF, Direction of Trade; and Fund staff estimates. Export data were extrapolated from estimates of partners’ import data. As data from differing sources do not always coincide, they should be regarded as illustrative.

Data for Benin, Ivory Coast, Nigeria, and Togo refer to 1978; for Niger, 1976 data were used; for other countries, 1977 data were used.

Petroleum exports account for nearly 91 per cent of the total.

Excludes Nigeria’s exports to the region and its imports from the region.

Intraregional trade is relatively low, accounting for less than 3 per cent of total exports and imports. Data for intraregional trade include re-exports of imports from outside the region. With respect to exports, this low percentage conceals a wide variation among member countries of the Community. About 17 per cent of Senegal’s exports are directed to other member countries. Cape Verde and Mali each direct about 10 per cent of their exports to other member countries. The member countries’ exports to the region range between 1 and 4 per cent, with Guinea having the lowest percentage (about 0.2 per cent). Because of the heavy weight of Nigeria in the total and because its exports to the region are relatively low (about 2 per cent), intraregional exports would rise to about 4.5 per cent on average if Nigeria’s exports to the region are excluded while the exports of other countries to Nigeria are retained.

Some interesting patterns emerge from the data on export flows within the region, as seen in Table 8. First, the percentage of exports from the member countries of the West African Monetary Union within the Community is above the average, except for Niger and Upper Volta. Among the Union countries, Senegal’s 17 per cent is considerably above the percentage share of any other country in the region. Second, the main regional export markets of the member countries of the Union are principally the non-Union countries of the Community. The exception is Ivory Coast, which directs over half of its exports in the region to other member countries of the Union. Third, the traditional ties with former metropolitan countries, reflected in the common language for a number of member countries of the Community, affect the pattern of exports within the region. For instance, Portuguese-speaking Cape Verde exports almost exclusively to Guinea-Bissau, where Portuguese is also the official language, and vice versa. Among the French-speaking countries, Ivory Coast, Mali, Senegal, and Togo direct their exports largely to other French-speaking countries in the region. Benin, Guinea, Niger, and Upper Volta do not conform to this pattern. The English-speaking countries—The Gambia, Ghana, Liberia, Nigeria, and Sierra Leone—concentrate their regional exports among themselves. Fourth, only Ivory Coast and Senegal have fairly diversified regional exports. Finally, Mauritania is the only country without any significant recorded exports to other member countries of the Community.

Table 8.ECOWAS: Direction of Regional Exports 1(In percentage of total exports)
Exporting Country
Importing

Country
BeninCape VerdeThe GambiaGhanaGuineaGuinea-BissauIvory CoastLiberiaMaliMauritaniaNigerNigeriaSenegalSierra LeoneTogoUpper Volta
Benin20.230.090.020.360.33
Cape Verde0.734.78
Gambia, The20.180.270.110.401.49
Ghana0.082.260.130.090.260.070.860.110.171.331.09
Guinea1.330.36
Guinea-Bissau10.910.06
Ivory Coast20.046.883.920.470.43
Liberia0.270.150.130.560.06
Mali0.880.131.441.070.02
Mauritania0.030.911.55
Niger30.500.530.120.070.400.09
Nigeria3.300.620.680.540.752.810.98
Senegal1.110.29
Sierra Leone0.150.020.050.010.130.510.06
Togo20.220.221.060.040.28
Upper Volta0.060.530.100.23
Total to ECOWAS3.8810.912.411.650.201.004.361.789.650.951.8116.833.103.411.61
Sources: Figures are extrapolated from Table 3, using data provided by the national authorities; IMF, Direction of Trade; and Fund staff estimates. Because of the wide discrepancies in data from various sources, the above percentages should be regarded as illustrative.

Unless otherwise indicated, data refer to 1977.

Data are for 1978.

Data are for 1976.

Sources: Figures are extrapolated from Table 3, using data provided by the national authorities; IMF, Direction of Trade; and Fund staff estimates. Because of the wide discrepancies in data from various sources, the above percentages should be regarded as illustrative.

Unless otherwise indicated, data refer to 1977.

Data are for 1978.

Data are for 1976.

The import profiles of Community members are essentially a mirror image of their export profiles. Intra-Community imports are about 2.6 per cent of total Community imports, but this average, as in the case of exports, conceals wide variations. Because of its importance in overall trade and because of the low level of its imports from the region relative to its total imports, Nigeria affects this percentage disproportionately. Excluding Nigeria’s imports from the region (but not the other countries’ imports from Nigeria), the average percentage of intra-Community imports would rise to about 7 per cent—still a relatively modest figure.

In terms of each member country’s total imports, regional imports account for over 30 per cent in Sierra Leone, about 27 per cent in Mali, 16 per cent in Upper Volta, 14 per cent in Niger, 12 per cent in Ghana, 9 per cent in The Gambia, and 7 per cent in Senegal. Regional imports of Benin, Liberia, Mauritania, and Togo range from nearly 3 per cent to 5 per cent. At the lower end of the scale, regional imports are below 2 per cent for Ivory Coast, Benin, Guinea, The Gambia, Guinea-Bissau, and Nigeria.

A few generalizations are appropriate in regard to the regional import profiles shown in Table 9. First, for all member countries of the West African Monetary Union except Ivory Coast, the percentage of imports from Community member countries is above the average for the region. Upper Volta and Senegal stand out from the group, with about 16 per cent and 7 per cent, respectively, but these percentages are lower than those for Sierra Leone and Mali. Second, most of the regional imports of the member countries of the Union come from other members of the Union. Third, the pattern of regional imports tends to be affected by the language used in the countries in the region, but this factor is less important than it is on the export side. Fourth, Community imports from within the region are primarily from only a few selected member countries; thus, the regional import profiles are generally not diversified. Finally, Mauritania, while not a significant exporter to any country in the region, reports sizable imports from Senegal, Liberia, and Ivory Coast.

Table 9.ECOWAS: Direction of Imports 1(In per cent)
Importing Country
Exporting

Country
BeninCape VerdeThe GambiaGhanaGuineaGuinea-BissauIvory CoastLiberiaMaliMauritaniaNigerNigeriaSenegalSierra LeoneTogoUpper Volta
Benin20.010.350.03
Cape Verde0.38
Gambia, The20.110.04
Ghana0.842.100.020.570.050.120.510.63
Guinea0.100.10
Guinea-Bissau0.200.04
Ivory Coast20.870.380.6818.580.207.910.143.480.181.3213.28
Liberia0.610.051.300.020.35
Mali0.030.500.350.071.05
Mauritania
Niger30.100.170.01
Nigeria0.930.3110.240.030.034.293.7030.720.970.10
Senegal0.910.703.370.091.041.390.838.373.401.650.160.240.460.69
Sierra Leone2.670.030.200.34
Togo20.300.390.060.030.050.020.57
Upper Volta0.290.050.12
Other Africa1.486.000.940.500.204.660.440.421.906.470.405.362.180.410.77
Total5.360.9015.1012.651.201.626.533.0227.816.8020.860.8312.5933.923.7517.16
Europe65.3365.7035.4375.8065.34469.2361.7672.9058.8765.7462.4445.3282.3063.65
Of which:
France28.551.106.502.3631.006.6939.273.6037.5243.1043.447.3740.036.0434.2044.64
Germany, Fed. Rep. of6.171.807.7012.603.403.587.229.196.598.706.7915.265.577.489.145.54
United Kingdom13.182.4028.3013.745.302.892.387.182.103.2021.742.3322.679.861.63
Other29.3019.2051.9223.00533.0424.2410.4320.4020.2533.4224.9720.7613.9519.20
Of which:
United States4.671.905.0013.418.803.325.2426.301.697.506.4110.538.3711.264.859.39
Japan4.751.102.704.405.201.177.288.782.393.302.9910.620.658.862.982.72
Total100.00100.006100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00
Sources: Data provided by the national authorities; IMF, Direction of Trade; and Fund staff estimates.

Unless otherwise indicated, data refer to 1977.

Data are for 1978.

Data are for 1976.

Imports from Portugal amounted to about 40.0 per cent of total imports in 1977.

Imports from the U.S.S.R. amounted to about 11.2 per cent and from the People’s Republic of China to about 8.7 per cent in 1977.

Imports from Portugal amounted to 45.2 per cent in 1977.

Sources: Data provided by the national authorities; IMF, Direction of Trade; and Fund staff estimates.

Unless otherwise indicated, data refer to 1977.

Data are for 1978.

Data are for 1976.

Imports from Portugal amounted to about 40.0 per cent of total imports in 1977.

Imports from the U.S.S.R. amounted to about 11.2 per cent and from the People’s Republic of China to about 8.7 per cent in 1977.

Imports from Portugal amounted to 45.2 per cent in 1977.

The import profile shows the heavy dependence of the Community member countries on trade with Europe. Almost two thirds of their imports are from Europe. For most of the French-speaking countries, about one third of their imports originate in France. For the two Portuguese-speaking countries, over 40 per cent of their imports originate in Portugal. Three English-speaking countries—The Gambia, Nigeria, and Sierra Leone—receive about a quarter of their imports from the United Kingdom, while Liberia receives about the same proportion from the United States.

Composition of Recorded Trade

For most countries in the region, exports are concentrated on agricultural commodities and minerals. Although some important agricultural products are common to many countries in the region, a brief overview for each country will serve to show the variety of the region’s exports. Benin’s export proceeds are derived primarily from palm products, cotton fiber and seeds, and cocoa beans. Cape Verde’s primary exports are salt, fish and shrimp, canned fish, and bananas, while The Gambia has a heavy dependence on exports of groundnut products. Ghana’s major export commodity is cocoa, with timber, aluminum, and gold of less importance. Guinea’s export receipts are almost exclusively from bauxite and alumina. Guinea-Bissau depends for most of its export proceeds on groundnuts and palm products. Most of the export proceeds of Ivory Coast come from coffee, cocoa, and timber. Over half of Liberia’s export proceeds are derived from iron ore, while rubber, diamonds, and logs and timber, together with such agricultural products as coffee, cocoa, and palm products, account for the rest. Mali derives about half of its export proceeds from cotton and the rest mainly from groundnuts, cereals, and livestock. Iron ore and fish account almost exclusively for Mauritania’s export receipts. Uranium concentrate provides most of Niger’s export proceeds; other major exports include livestock, groundnuts, cotton lint and seed, and vegetables. Nigeria depends on petroleum exports almost exclusively to the extent of over 90 per cent. Senegal exports mainly groundnuts and related products, phosphates, and fertilizers, as well as fish, shellfish, and related products; it is one of the few countries of the region for which industrial products are a significant proportion of total exports (about 19 per cent). Almost two thirds of Sierra Leone’s exports are minerals (mainly diamonds), but agricultural commodities, such as coffee, cocoa, and processed palm kernels, are also important. The three commodities accounting for most of Togo’s export proceeds are phosphates, cocoa, and coffee. Upper Volta earns about a third of its export proceeds from livestock products, another third from cotton lint, and smaller proportions from sheanut products, other oil seeds, vegetables, and fruits.

Import commodities are not specifically identified here because of their variety. However, the region’s imports, as seen in Table 9, originate primarily in the industrial countries and are concentrated on foodstuffs, beverages and tobacco, durable consumer goods, intermediate and capital goods, and, with few exceptions, petroleum products.

Factors Affecting Intraregional Trade

Given the geographical proximity of the member countries of the Community, intraregional trade is extremely small. Significant factors impeding intraregional trade include (1) the noncomplementary production structures of the member countries of the Community, transportation problems within the region, and lack of adequate communication facilities; and (2) impediments that would become increasingly important once the first group is alleviated, including trade barriers (such as tariffs and quantitative restrictions), problems of currency convertibility, and the dearth of organized centers of information on the availability of products in other countries in the region.

Perhaps the most important determinant of the low level of intraregional trade is the production profile of the economies of the Community members. As noted in the preceding section, most of these countries concentrate heavily on the production of primary agricultural and mineral products. Although most of them have small-scale industries, the production of such industries is aimed primarily at satisfying local consumption needs. Import demand in the region is concentrated on processed foodstuffs, durable consumer goods, intermediate goods, and capital goods—most of which can be supplied at present only by the industrial countries.

The lack of adequate intraregional road, railway, and air transport networks results in prohibitively high transportation costs and acts as a major impediment to intraregional trade. The shortage of modern storage facilities also aggravates the situation since perishables often cannot be stored to await transportation. As a result, commodities at times can be imported more rapidly and less expensively (in terms of transportation costs) from the industrial countries than can similar goods from neighboring countries.

Inadequate communications facilities are also a significant obstacle to intraregional trade. Telephone communications often have to be channeled through third countries. Besides being difficult, intraregional communications are extremely expensive. The telegraph and telex network within the region is sometimes unreliable and costly, while mail is subject to lengthy delays. Accordingly, placement of orders within the region and follow-up on such orders can be both costly and time-consuming.

As these basic obstacles to intraregional trade are alleviated, the second group will become more important. Trade barriers to intraregional transactions, such as tariffs, export taxes, and quantitative restrictions, need to be eliminated. At present, however, the heavy dependence of most member countries of the Community on customs receipts for government revenue, together with a desire to protect domestic industries, results in inordinately high tariffs. In most member countries, tariffs are applied without any preferential treatment for other member countries. The current tariff structure, therefore, does not provide any special incentive to import from other countries in the region. However, the Community plans to eliminate all intraregional tariffs by 1989.

The inconvertibility of a number of the currencies in the region also acts as a deterrent to trade. To some extent, the West African Clearing House has provided an avenue for the use of local currencies in intraregional trade, but it has faced a number of problems (discussed in Chapter V). When the obstacles to intraregional trade (identified above) are removed, the full convertibility of the regional currencies accompanied by the expansion and improvement of the Clearing House facilities would become more important factors in encouraging intraregional trade.

Few countries in the Community have access to adequate information on the availability of products originating in the region. As bottlenecks are removed and as goods commence to flow to other countries in the region, the dissemination of information regarding the availability of locally produced goods will become increasingly important.

Unrecorded Trade

No reliable information is available on the pattern of unrecorded trade within the Community, although it is generally acknowledged that unrecorded border trade is of considerable importance. There are a number of reasons for such trade. First, national boundaries have sometimes been drawn across traditional boundaries, and residents in such areas have continued their traditional trading patterns. Second, variations in the availability of goods result from differences in the restrictiveness of the exchange and trade systems. Consequently, primary goods from countries with highly restrictive systems are often traded for goods that originate in industrial countries and are available in countries in the Community with more liberal trade systems. Third, considerable differentials in prices of certain goods, resulting from differing inflation rates, disequilibrium exchange rates, different tariff levels, or varying degrees of subsidies, have been continuing incentives for border trade.

The main items in border trade appear to be agricultural products, some mining products (such as diamonds), artisanal handicrafts, textiles, and light consumer durable goods. Such trade generally is not of a barter nature, but is transacted in regional currencies that are relatively convertible.

Potential for Trade

The extent to which intraregional trade will develop depends in large measure on the alleviation of the current limits on such trade. The major deterrent to trade—the noncomplementary production profiles—can be overcome only by a carefully designed and coordinated regional investment strategy aimed at developing complementary industries.

There is, however, some scope for increasing intraregional trade over the short term or medium term in goods produced by existing industries. A recent study has identified such goods as being largely composed of semiprocessed and light industrial products.14 These include beverages, confectionery, chalks, salt, cosmetics, pharmaceuticals, chicken feed, dried fish, pepper, ginger, nails, kola nuts, manufactured tobacco, meat, ceramics, footwear, timber, wood products, textiles, cement, crude oil, refined oil, sheet aluminum, electrical appliances, razor blades, matches, candles, bicycles, fruits and vegetables, and assorted chemical products.

Another study15 examined the regional production of a selected group of light industrial products and the demand for such products with a view to determining how much the production of such goods could be accelerated to satisfy regional demand. The study covered 13 products: automobile batteries, dry batteries, bicycles, ceramic tiles, sanitary ware, electric light bulbs, electric plugs and sockets, glass containers, flat glass, disposable hypodermic syringes, ceramic tableware, plastic tableware, and telephone handsets. These products were identified as those in which production for intraregional trade could be easily expanded.

United Nations Conference on Trade and Development (UNCTAD) and Economic Commission for Africa, A Study of Recorded Trade Flows (1978).

International Trade Center, UNCTAD and the General Agreement on Tariffs and Trade (GATT), The Profiles and Potential of External Trade of Members of the Economic Community of West African States (1978).

    Other Resources Citing This Publication