Regional Integration and National Binding

Constraints

-

ECOWAS' Capability and Potential to

Solve Constraints to Growth and Poverty

Reduction of Its Member States

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Step I - Meta-Analysis of ECOWAS' Institutional

Responses to Its Member States' Development

Constraints

First Draft - Comments Welcome

Julian Frede, University of Trier, Germanyfrede@uni-trier.de

http://www.uni-trier.de/index.php?id=34982

August 27, 2012

Abstract

This analysis identi�es development constraints at the national and the re-spective regional community level and reveals strong awareness and institu-tional responsiveness of the Economic Community of West African States(ECOWAS) to its member-speci�c needs.First, this paper conducts an extensive literature review of national policy toidentify the country-speci�c constraints to development. Further, the con-straints' regional signi�cance is discussed. Second, policy of ECOWAS is re-viewed to check for awareness to the member's constraints. Third, ECOWAS'institutional responses in matters of relaxing country-speci�c constraints areidenti�ed. Tangible activities by regional institutions serve as indicator.Fourth, the members' constraints are set in relation to awareness and insti-tutional responses of the regional community.Summing up, the meta-analysis shows that ECOWAS is not only aware butresponds institutionally to almost every member constraint. This result callsfor further research on e�ciency, su�ciency, and organizational structure ofthe regional institutional responses.

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Contents

1 ECOWAS' Institutional Responses to Its Member States'Development Constraints 61.1 Constraints to Development in a Regional Context . . . . . . 71.2 The Context of ECOWAS' Activities: the West African Region 9

2 Common Patterns in the National Constraints 122.1 Identifying National Constraints to Development . . . . . . . 122.2 Listing All Constraints to ECOWAS Countries . . . . . . . . 132.3 Patterns of National Constraints in the Region . . . . . . . . 16

3 ECOWAS' Awareness of Constraints and Its InstitutionalResponses 193.1 ECOWAS' Awareness of National Constraints . . . . . . . . . 193.2 Institutional Responses to Constraints . . . . . . . . . . . . . 21

3.2.1 Government . . . . . . . . . . . . . . . . . . . . . . . . 213.2.2 Overall Environment for Development . . . . . . . . . 273.2.3 Private Sector and Investment . . . . . . . . . . . . . . 29

3.3 Discussion of Institutional Responses . . . . . . . . . . . . . . 31

4 Conclusion: Regional Responses to Members' Constraints 33

5 Bibliography 35

6 Appendix 506.1 Collecting National Binding Constraints - a Literature Review 50

6.1.1 Republic of Benin . . . . . . . . . . . . . . . . . . . . 506.1.2 Republic of Burkina Faso . . . . . . . . . . . . . . . . 516.1.3 Republic of Cape Verde . . . . . . . . . . . . . . . . . 526.1.4 Republic of Cote d'Ivoire . . . . . . . . . . . . . . . . 536.1.5 Republic of The Gambia . . . . . . . . . . . . . . . . . 546.1.6 Republic of Ghana . . . . . . . . . . . . . . . . . . . . 556.1.7 Republic of Guinea . . . . . . . . . . . . . . . . . . . . 566.1.8 Republic of Guinea-Bissau . . . . . . . . . . . . . . . . 576.1.9 Republic of Liberia . . . . . . . . . . . . . . . . . . . . 58

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6.1.10 Republic of Mali . . . . . . . . . . . . . . . . . . . . . 586.1.11 Republic of Niger . . . . . . . . . . . . . . . . . . . . . 596.1.12 Federal Republic of Nigeria . . . . . . . . . . . . . . . 606.1.13 Republic of Senegal . . . . . . . . . . . . . . . . . . . . 616.1.14 Republic of Sierra Leone . . . . . . . . . . . . . . . . . 626.1.15 Togolese Republic . . . . . . . . . . . . . . . . . . . . 63

6.2 Organization of ECOWAS Institutions . . . . . . . . . . . . . 646.3 Tables and Figures . . . . . . . . . . . . . . . . . . . . . . . . 66

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List of Abbreviations

ABREC African Bio-fuels and Renewable Energy CompanyABREF African Bio-fuels and Renewable Energy FundAfD Agence francaise de développementAfDB African Development BankAMESD African Monitoring of the Environment for Sustainable DevelopmentANSTI African Network of Scienti�c and Technological InstitutionsCAS Country Assistance StrategyCIC Community Investment CodeCIM Common Investment MarketDACO Development Assistance Coordination O�ce

of the Government of Sierra LeoneDFID Department of International DevelopmentEAU Electoral Assistance UnitEBID ECOWAS Bank for Investment and DevelopmentECONEC Network of Electoral CommissionsECOWAS Economic Community of West African StatesUEMOA West African Economic and Monetary Union

(Union Economique et Monétaire Ouest Africaine)ECOWAS-FODETE Fund for Development and Financing of ECOWAS Transport and Energy

Sectors (Fonds regional de Développement et de �nancement des secteursdes Transports et de l'Energie)

ECOWAS-TEN ECOWAS Trade and Enterprise NetworkECREEE ECOWAS Regional Centre for Renewable Energy and Energy E�ciencyEGDC ECOWAS Gender Development CenterEGDC ECOWAS Gender Development CentreEPADP Economic Partnership Agreement (EPA) Development ProgrammeERERA ECOWAS Regional Electricity Regulatory AuthorityESF ECOWAS Standby ForceETLS ECOWAS Trade Liberalization SchemeExPECT Framework for Export Promotion & Enterprise Competitiveness for TradeEYSDC ECOWAS Youth and Sports Development CentreFDI Foreign Direct InvestmentFOWAPP Forum of West African Political PartiesGDP Gross domestic productGIABA Inter-Governmental Action Group against Money Laundering

and Terrorism Financing in West AfricaGIZ Deutsche Gesellschaft für Internationale ZusammenarbeitGPRS Growth and Poverty Reduction Strategy PaperGSGDA Ghana Shared Growth And Development AgendaIMF International Monetary FundJAS Joint Assistance StrategyMDG Millennium Development Goals S. 59

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MEF Ministère de l'Economie et des FinancesNACIWA Network of National Anti-Corruption Institutions in West AfricaODA O�cial Development AssistanceOECD Organisation for Economic Co-operation and DevelopmentPAGE Programme for Accelerated Growth and EmploymentPANA National Environmental Action PlanPAPS Political A�airs, Peace & SecurityPND National Development PlanPRS Poverty Reduction StrategyPRSAO West African Regional Health ProgrammePRSP Poverty Reduction Strategy PaperRPRSP Regional Poverty Reduction Strategy PaperRPRSP-WA Poverty Reduction Strategy Paper for West AfricaSCADD Stratégie de croissance accélérée et de développement durableSME Small and Medium-Sized EnterpriseTF ECOWAS Task ForceUN United NationsUNDP United Nations Development ProgrammeUNGEI United Nations Girls Education InitiativeWACIP West African Common Industrial PolicyWAEMU West African Economic and Monetary UnionWAGP West African Gas Pipeline ProjectWAHO West African Health OrganizationWAMA West African Monetary AgencyWAMI West African Monetary InstituteWAPP West African Power PoolWAUTI West African Union of Tax InstitutesWRCC Water Resources Coordination CentreWRCU Water Resources Coordination Unit

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Chapter 1

ECOWAS' Institutional

Responses to Its Member

States' Development

Constraints

This paper focuses on the potential of regional communities to assist theirmember states in relaxing their country-speci�c constraints to development.Therefore, as a �rst analytical approach, an extensive literature review iscarried out to assess a community's awareness of national constraints togrowth and poverty reduction and its responses to the constraints by meansof institutional structures and activities. As a role model for a regional com-munity, the Economic Community of West African States (ECOWAS) hasbeen chosen.In the process of analysis, �rst, the national constraints to growth are iden-ti�ed for each ECOWAS member state, as de�ned in their national policystrategies. Today, these strategies and their respective policy recommenda-tions emphasize country-speci�c constraints to growth and their relaxation.This rather new perspective is closely linked to the �Growth Diagnostics�approach of Hausmann et al. (2005) and the inclusive growth approach (Ian-chovichina & Lundstrom, 2009). The latter presents a further developmentwith a broader perspective on sustainable, long-term growth. Most policypapers do not follow strictly a systematic growth or inclusive growth anal-ysis. There is a very limited number of explicit growth diagnostics (4) andtwo more related documents. Thus, constraints in this paper are constraintsto development, not only to growth. Nevertheless, a country-speci�c analy-sis of development constraints typi�es the basic structure of most nationalgrowth and poverty reduction strategies in developing countries that identifythe respective national constraints. The present analysis reveals 29 di�erentnational constraints within the member states of the ECOWAS. Each one is

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present in more than one country.Second, the constraints are clustered to examine if they are purely nationalconstraints or if they hold back growth in a regional context. In this process,it becomes clear that the regional community has to focus on all 29 identi�edconstraints. Therefore, a meta-analysis discusses institutional responses atthe regional level to the member states' constraints. This process involvesdetecting and proving regional institutions actual existence and activities.Thus, an extensive literature review concentrates on recent institutional ac-tivities to provide evidence for tangible results.The ECOWAS' institutions, objectives, and actual activities respond to al-most all identi�ed constraints. The paper concludes with a discussion ofthese institutional responses indicating regional weaknesses with regard tothe constraints. The major weakness is the lack of responses to unsustain-able population growth. Besides identi�cation by member states and byECOWAS, actual activities are not detectable.Summing up, the meta-analysis result is that the ECOWAS is not only awarebut responds institutionally to almost every member constraint. This resultcalls for further research on e�ciency, su�ciency, and amenability of theregional institutional responses.This introductory chapter further presents the research context and motiva-tion followed by a short overview of ECOWAS' regional context. The secondchapter presents the analysis of national constraints are the discussion withregard to their regional relevance. In the third chapter, ECOWAS' awarenessof constraints is identi�ed and institutional responses by ECOWAS's to thenational constraints are analyzed. The last chapter concludes.

1.1 Constraints to Development in a Regional Con-

text

�Promoting convergence and, above all, growth in this region [ECOWAS]requires a deeper understanding of country-speci�c features and focus on

the `most binding constraints' to growth, as outlined in the `growthdiagnostics' approach.�(Tirelli, 2010, p. 4)

In the United Nations analysis cited above, Patrizio Tirelli highlights theproblems, but also the need of assessing development potential at the re-gional level. As has been shown, the trend of development analysis is toidentify country-speci�c constraints. Considering these constraints is an es-sential part of any regional development policy.One question arises in this context: Does regional policy consider nationalconstraints?This research presents an analysis of the awareness of regional communities

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of the national constraints of their member states. Furthermore, this paperincludes an analysis of institutional responses of the regional communitieswith regard to the national constraints. Thus, the motivation of this researchis to answer if regional strategies are ignorant to national needs. Using theexample of ECOWAS, the question narrows down to, if and where ECOWAScould improve its regional policy to properly target regional challenges.In this paper, we do not question the countries' development strategies andthe development strategies' compilation processes, but we take the con-straints found in these papers as the country- and time-speci�c constraintsto development. Nevertheless, limitations clearly exist as in reality nationalor regional development strategies do not follow explicitly a systematic ap-proach such as growth diagnostics or inclusive growth diagnostics. But it isat least questionable if these systematics would lead to more reliable resultsthan the present policy documents (e.g. in Leipziger & Zagha (2006))1.

�To create a borderless, peaceful, prosperous and cohesive region built ongood governance and where people have the capacity to access and harnessits enormous resources through the creation of opportunities for sustainable

development and environmental preservation.ECOWAS (2010d)�Vision statement of the ECOWAS

The Economic Community of West African States (ECOWAS) was foundedin 1975. Its vision statement adopted in 1975 is still in place (with smallchanges) and this paper �ts well to this general policy objective, discussingECOWAS's awareness of national development constraints. There are twomain missions to ECOWAS: First, the ECOWAS institutions provide a �fo-rum and framework for sustainable economic development and poverty re-duction�(ECOWAS, 2010c, p. 5). Second, the institutions seek to promoteregional peace and political stability (ECOWAS, 2010c). Behind this word-ing stands the idea that regional integration remains one of the most ap-propriate ways to initiate development. Therefore, ECOWAS' mission is torelax regional constraints to development, in the early days of the communitymore focussing on economic development, today with a broader approach todevelopment integrating the ideas of human and sustainable development.One indication in this regard is the o�cial change of ECOWAS' perspectivefrom an �ECOWAS of States� to an �ECOWAS of People� as stated in theECOWAS Vision 2020 (ECOWAS, 2010d, p. 3). ECOWAS' organizationalstructure will be introduced in more detail in the appendix.

1Needs further research!

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Figure 1.1: ECOWAS' countries, Source: Eurostat (2009)

1.2 The Context of ECOWAS' Activities: the West

African Region

To shortly introduce the ECOWAS political and economic environment, ithas to be emphasized that this organization operates in one of the most dif-�cult regions worldwide. It is characterized by harsh poverty, which can befound region-wide. Furthermore, political instability and even frequent openmilitary con�icts are widespread.Let's take a short look at poverty �rst. From 1986-2010, ECOWAS coun-tries experienced an increase in GDP per capita (constant 2000 US$) of 41%,which is equal to an average annual growth rate of 1%.2 This is a successstory at �rst glance. There are two aspects in this positive performance whichpoint to a di�erent picture. First, wealth is unequally distributed betweenthe ECOWAS countries (- not to mention inequality within the countries).This is illustrated in �gure 1.2.On the one hand, Cape Verde almost doubled its GDP per capita, and

countries such as Ghana and Nigeria grew by 75%. The growth in Nigeriathat a�ects about half of ECOWAS's population, is the major cause of an

2Before 1986, data for ECOWAS in total is not available (World Bank, 2012e)

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Figure 1.2: ECOWAS' countries GDP/capita change from 1986 to 2010,Source: World Bank (2012e)

overall positive regional performance. On the other hand, Liberia experi-enced a decrease of more than 72% in GDP per capita, followed by Coted'Ivoire (-20%) and Niger (-12%).Second, comparing ECOWAS's GDP per capita and its growth performanceto other regions' GDP per capita and their growth performance reveals awidening gap with ECOWAS at the low end of per capita income and growthperformance - �gure 1.3 shows this gap.In 1960, ECOWAS started with only 62% of the Sub-Saharan income level,

Figure 1.3: ECOWAS' GDP/capita in % of GDP/capita of other regions(1960-2010), Source: World Bank (2012e)

the poorest region worldwide. ECOWAS reached a relative income level ofalmost 30% of the East Asian region and well below 10% of the Europeanand Central Asian income per capita. Thus, even the start has been di�-

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cult. Until 2010, the gap to all groups has widened. Now, ECOWAS reachesonly 42% of the Sub-Saharan per capita level and with respect to the otherregions the distance has been even larger. The relative income of ECOWAScompared to the other regions decreased substantially. Thus, despite somesuccess in selected countries, in total, ECOWAS countries experienced onlya very limited growth and increase of GDP per capita.Political instability has to be mentioned as a key aspect to ECOWAS' devel-opment, too. There has been and there is currently war and civil war in theregion strongly a�ecting previous development e�orts. From 1960 to 2008,out of �fteen member countries only two were not involved in war or civilwar (Edi, 2007, p. 32). It comes as no surprise that in this paper, politicalinstability has been identi�ed as a major constraint to development in twothirds of the countries.

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Chapter 2

Common Patterns in the

National Constraints

The meta-analysis of constraints in the ECOWAS member countries reveals29 national constraints to development. This manageable number resultsfrom the fact that some major constraints, for example poor governance orpolitical instability, are restraining more than half of the countries. Anotherimportant reason for the relatively low number of constraints is the actualcomposition of a constraint. One example is the poor governance constraint,which accumulates constraints related to government activities such as cor-ruption or inadequate property rights. Therefore, the manageable numberof constraints results partly from accepted limits in detailedness. Neverthe-less, the composition of constraints re�ects how constraints are presentedand setup in the analyzed documents. In section 2.1 of this chapter, thenational constraints are introduced and discussed in section 2.2. The section2.3 focuses on the discussion of potential patterns of national constraints inthe region.

2.1 Identifying National Constraints to Develop-

ment

Identifying national constraints has been a challenging e�ort for a literaturereview. Table 6.2 lists the major documents by country and the appendixprovides the literature reviews for each country. On the basis of the con-straints identi�ed in these documents, the identi�cation process continuedby considering further work, e.g. by the government, the Bretton Woodsinstitutions, the OECD, UN institutions or individual authors.This paper focuses on constraints to growth and poverty reduction, thus,on constraints to development in general. This has been necessary becausemost policy papers do not conduct a systematic growth or inclusive growthanalysis. There is a very limited number of explicit growth diagnostics (4)

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and two more related documents. The 30 documents listed in table 6.2reveal that the majority of information originates from government docu-ments (53%) or the documents of the Bretton Woods institutions (27%).The complementary basic literature (20%) is mainly donor driven, e.g. bythe African Development Bank (AfDB) or the United Nations DevelopmentProgramme (UNDP). Despite the predominance of government analysis, ithas to be emphasized that almost none of the documents is purely writtenand funded by the government itself. Most funding comes from donor institu-tions such as the IMF and the World Bank, but also from other donors suchas UNDP or the Deutsche Gesellschaft für Internationale Zusammenarbeit(GIZ). Throughout the study, the issue of donor in�uence on the analyzeddocuments has to be kept in mind - especially since the poor governanceconstraint, thus, low institutional implementation capacity, is identi�ed as aconstraint in fourteen of �fteen countries.

2.2 Listing All Constraints to ECOWAS Countries

Figure 2.1 lists all constraints identi�ed in the literature for the 15 ECOWAScountries.29 constraints have been identi�ed. For a better overview, the 29 constraintsare divided into three groups: 1. private sector and investments, 2. gov-ernment, and 3. overall environment for development. Sub-groups are in-troduced to further arrange the constraints. E.g. within the governmentcontext, there are 16 constraints which are linked to special government fail-ures, human capital, and infrastructure. A theory based starting point for abasic framework of constraints has been described in the Growth Diagnosticand the Inclusive Growth Diagnostic approaches. Nevertheless, the list ofconstraints has been completely �exible to �ndings in the literature.Identi�ed constraintsMost of the constraints can be found in the context of (1) governmentactivities. Especially the categorization in the sub-group of governmentfailures has been challenging. To allow a manageable and comprehensiveoverview of the constraints, the majority of governance-problems are accu-mulated in the constraint �poor governance + corruption� - a typical wayof presenting governance issues in the analyzed documents. All governancerelated problems have in common inadequate behavior or poor performanceof government institutions. In particular, this constraint includes amongstothers corruption, transparency, rule of law, and property rights issues. Cor-ruption has been on the agenda each time governance has been identi�ed asa constraint, therefore, corruption is placed next to the poor governance con-straint's name. The constraints 2-6, labor market rigidities, high taxation,state owned �rms, unsustainable government �nance, lack of data due toinadequate statistics, and barriers and cost of doing business are constraints

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Figure 2.1: List of constraints, sub-level and main context

explicitly identi�ed and discussed on their own in a large number of states.With regard to labor market rigidities it has to be highlighted that thisconstraint is characterized by unskilled human capital, i.e., the lack of su�-ciently well-educated human capital.1 The last constraint in this sub-group,coordination failure, is generally linked to governments but could also be putinto a market failure context. As activities to solve coordination problemsare generally institutionalized within the government or at least initiated bythe government, they are linked to the former. Besides the obvious govern-ment failures, there is a more general discussion with regard to educationand health issues, especially their constraining impacts on human develop-ment. Both are combined under the name human capital, as they are alsomostly treated separately in the analyzed documents. The next sub-group isinfrastructure, which consists of six constraints: three transport related con-straints (air, water, land), two constraints focusing on basic supply of energyand water (and sanitation), and one integrating challenges with regard to

1Just in Cape Verde the labor market in�exibility due to unskilled and unproductivelabor is supplemented by the high labor costs due to labor market regulations(Governmentof the Republic of Cape Verde, 2008, p. 48, 84)

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communication technologies, telephone, mobile phone, and internet. Here,the energy constraint includes not only electricity but also general energyissues such as the supply of gas or constraining energy-related regulations.The second context for a group of constraints is the (2)overall environ-ment for development. Here, one major sub-group for two constraintsis political instability. In general, political instability is in some countriesthe major constraint to development. But in post-con�ict countries, theproblematic rebuilding of institutions is clearly linked to instability. Next,environmental risks can be split into unsustainable resource exploitation andgeneral environmental risks. The latter could be deserti�cation or �oodingwhich are often viewed in conjunction with climate change. In this context,population growth has also been identi�ed as a severe constraint, leading toan overuse of the ecological capacities. Moreover, population growth initi-ates social challenges to the health and education system. Finally, one verynew and de�nitely sensitive constraint has been identi�ed: �culture�. Somerecent studies identify culture as a constraint to development arguing thatcertain traditions and behavior hold back development. In Gambia, for ex-ample, male-biased inheritance, kinship obligations, Fatalism, or a backwardbending tendency to compromise is mentioned (Government of the Republicof The Gambia, 2011).Within the context of (3)private sector and investment, the �rst sub-group is investment and �nancing. Here, constraints with regard to thequantity and quality of investment are assessed. The former describes thegeneral amount and the relation of private to public �nances whereas the lat-ter focuses on judging sustainability of investments and �nancing costs for�rms. Market failures in this context is a sub-group including self-discoveryand low demand. A lack of self discovery means a lack of entrepreneurialactivity. Self discovery covers not only innovation problems in the privatesector, which are generally linked to poor capacity, a lack of innovative clus-ters, and human capital, but also includes problems of scaling up innovativeproduction, as is the case in Ghana. Low demand is related to a small do-mestic market. The constraint of low diversi�cation is clearly linked to thisproblematics. This constraint highlights not only the external risks due tohigh dependency on a few main export goods, mostly commodities, but alsothe internal risks due to a highly concentrated economy.Discussion of existing constraints The West African region is one of thepoorest and least developed regions in the world, constrained by external andinternal development challenges. With regard to the overall environment fordevelopment, external environmental risks endanger all development e�ort.Nevertheless, even the overall environment is clearly negatively a�ected byinternal problems, e.g. instability or unsustainable population growth. Thisintuitive emphasis on internal problems is intensi�ed when accounting forthe numerous internal development constraints. With regard to these con-straints, West Africa's national institutions (government + private sector

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and investments) barely have the capacity to build and maintain a function-ing state or market system. Thus, at �rst glance, despite severe externalchallenges ECOWAS member countries have a long list of major constraintsto their development whose relaxation can be initiated by internal processes.It has to be emphasized that the constraints are all connected - as all activ-ities in a state and economy.2

2.3 Patterns of National Constraints in the Region

This section presents and discusses the frequency of occurrence for each ofthe identi�ed constraints in the region. Each of the constraints has beenexplicitly identi�ed in more than one nation. Nevertheless, there are signi�-cant di�erences in the frequency.DescriptionTable 6.3 and a graphical illustration display all constraints ordered by fre-quency of occurrence. In addition, table 6.5 shows them ordered by theircontext and sub-level.There are �ve constraints which almost every country identi�es as constrain-ing (13-14 of 15 countries, or 87%-93%). First, there is inadequate energysupply, which is directly or indirectly linked to infrastructure - e.g. directlyby necessary grid-extension in Benin or indirectly by high electricity pricesdue to low quality installation in Senegal. Besides this energy constraint, itis the transport infrastructure that holds back the entire region. Thereby,the poor infrastructure is often connected to poor management. The equallyranked constraint �poor governance and corruption� con�rms that poor in-stitutional management as a part of poor governance is regionally signi�cant.In addition to poor governance, coordination failures are another highly rel-evant constraint which is also linked to management capacities. This revealsa lack of institutional capacity to coordinate activities, in general relatedto economic activities, e.g. the agricultural sector in Mali, the oil sector inGhana or the transport sector in Burkina Faso, but also to organize basicpublic services, such as a health system (poor management of the healthsystem severely constrains Niger and �ve other ECOWAS member states).The last constraint is also closely linked to the previous four: the barriersand costs of doing business. This constraint represents a large variety ofbusiness related costs. The high frequency is supported by the overall doingbusiness ranking of the World Bank which ranks ECOWAS poorly (WorldBank, 2011f, p. 2).3

There are seven additional constraints identi�ed in at least half of the coun-tries (8-11 countries, or 53%-73%). Together with the �ve top constraints,

2For further discussions on this issue, see the nice modeling on distortions in Hausmannet al. (2005).

3Except for Ghana which has a signi�cantly better rating.

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they underline the importance of infrastructure and, in general, governmentactivities related to the relaxation of constraints. Only two constraints donot fall into the government category. First, there is the problem of eco-nomic diversi�cation which is a typical structural feature of developing coun-tries. Second, environmental risks including internal factors but also climatechange are identi�ed as a problem. With regard to the current drought andfamine in the Sahel, this constraint is probably underestimated in its im-portance as for example Togo and Senegal do not identify this constraintdespite depending heavily on agriculture and, thus, on increasingly irregularrain falls.Summing up, all of the most frequent constraints and 5 out of 7 of the con-straints identi�ed in at least 50% of the countries are related to governmentactivities. This is a strong signal of the potential to internally resolve themost challenging problems.Identifying constraints as purely national does not serve the re-search purpose.For each of the remaining nationally identi�ed constraints, at least two coun-tries identify them in their policy documents. Even constraints with thelowest frequency clearly have regional components such as the lack of dataavailability. However, instable countries due to con�ict mostly do not iden-tify them as constraints due to a focus on more urgent problems. None of theconstraints identi�ed in the literature has been explicitly found in only onecountry. Thus, all constraints appear to be regional issues. Now, de�ninga threshold for the number of countries as basis to identify constraints asregional, sub-regional or purely national is not only di�cult but also mis-leading. There are several reasons to analyze all constraints further.First, the document authors' motivation and manpower needs to be takeninto account. It is at least questionable that an analysis can be fully compre-hensive in assessing development constraints even if the existing literature isreviewed. The discussion on �cultural constraints� serves as a good examplein this regard. Three times identi�ed, this constraint has not been discussedin any other country document. Therefore, cultural constraints as a rathersensitive topic might be constraining more ECOWAS member countries thanthe reported frequency indicates. This discussion could be continued untilconstraints that were not even identi�ed have to be included into the analysis,but this paper will focus on constraints of which the national governmentsare at least aware. Nevertheless, with regard to the e�ort on identifyingconstraints, some may have been left out due to the overlap of a relatedconstraint. For example, the low demand due to a small domestic marketis sometimes identi�ed as a constraint, sometimes it is left out - we couldassume this is due to its obvious existence or that this constraint is de�nedas part of di�culties connected to diversi�cation or coordination problems.Second, there is a limited amount of documents per country discussing con-straints. Therefore, it is di�cult to rule out that some constraints have been

17

overlooked. Third, the underlying time perspective (short-, medium-, long-term) is another issue which has not been clearly de�ned in each documentand which can lead to the inclusion or exclusion of certain constraints. Forexample, it is not self-evident to come up with the constraints of the smalldomestic market or cultural constraints to development when the country isa post-con�ict country - or is en route to con�ict. Fifth, there are limitationto the literature review provided by this paper. Despite the e�ort put intothe document analysis, some constraints might have escaped the alert eye.Thus, analyzing only the frequency and ruling out some constraints by anarbitrary threshold would possibly exclude some regionally important con-straints. Therefore, in the next chapter, this paper discusses all 29 con-straints with regard to ECOWAS' awareness and institutional responses.

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Chapter 3

ECOWAS' Awareness of

Constraints and Its

Institutional Responses

In the last decade, the most comprehensive work on constraints to growthand poverty reduction focussing on ECOWAS has been the Regional PovertyReduction Strategy Paper (RPRSP) of ECOWAS and the West African Eco-nomic and Monetary Union (WAEMU)(ECOWAS & WAEMU, 2006a).1 Inthe �rst section, the constraints identi�ed by ECOWAS itself are presented,thus, ECOWAS awareness towards national constraints is assessed. Here,the constraints identi�ed in the RPRSP are complemented by more recentpublications, e.g. by the ECOWAS Commission and the EBID. In the thirdsection the recent national constraints identi�ed in chapter II are related torespective institutional responses by the ECOWAS framework - if existent.The fourth section summarizes the results of this meta-analysis.

3.1 ECOWAS' Awareness of National Constraints

The major document with regard to regional constraints is the the RegionalPoverty Reduction Strategy Paper for West Africa (RPRSP-WA)(ECOWAS& WAEMU, 2006a). In this document, ECOWAS emphasizes the problemthat fragmented approaches are not su�cient to solve numerous constraintswhich are transnational. Rather than national, in 2006 ECOWAS, togetherwith the WAEMU, prepared this regional strategy which is the basis of thissections overview on constraints identi�ed by ECOWAS.What has been identi�ed in 2006 is still mostly similar to the national con-straints recently identi�ed in documents such as the ECOWAS Regional

1The WAEMU is another regional community, cooperating with ECOWAS consistingof the French speaking countries: Benin, Burkina Faso, Cote d'Ivoire, Mali, Niger, Senegaland Togo and Guinea Bissau. For more information see Lavergne (1997).

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Strategic Plan (2011-2015) (ECOWAS, 2010c), its Vision 2020 (ECOWAS,2010d) or the EBID Strategic Plan 2010-2014 (EBID, 2009b). The majorityof the recent national constraints, described in chapter II, are also identi�edin the ECOWAS documents. Table 6.6 in the appendix compares the con-straints identi�ed by ECOWAS with the categories and constraints appliedin chapter II. There are only six nationally identi�ed constraints which arenot mentioned in the regional documents. There is no noticeable patternwithin the not-identi�ed constraints. Table 3.1 provides an overview.For two of them, inadequate statistics, and culture, the reason for their ab-

Figure 3.1: Recent regional constraints not identi�ed by ECOWAS

sence could be the lack of awareness in the region towards these constraints- this argument gains strength when considering the frequency of these con-straints, 2 and 3 respectively, in the national documents. This is very lowcompared to other constraints. Moreover, for both the potential of being ig-nored is high as has been discussed in chapter II. The constraints state owned�rms and unsustainable natural resource exploitation could be included im-plicitly. The problem of state owned �rms is not explicitly identi�ed but itcan be argued that it is part of other constraints, e.g. improving the businessenvironment and considering coordination failures of markets and the state.The same argument holds for unsustainable natural resource exploitationand poor quality of investment. For the former, the focus on environmentalrisks could be widened up to these related constraints. For the latter, thediscussion on investment quantity should involve qualitativ aspects. Never-theless, it has to be noted that all four are not explicitly identi�ed, thus,the awareness is minor on the regional level compared to the country level.The absence of the constraint related to too high public investment will bediscussed in the next section. The next section also provides a discussion oninstitutional responses of ECOWAS for each constraint which goes beyondtheir pure identi�cation in regional documents.

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3.2 Institutional Responses to Constraints

This section discusses the institutional responses of ECOWAS to the previ-ously identi�ed national constraints. Special attention is paid to the insti-tutions which have the potential to relax the six unmentioned constraintsindicating an implicit policy awareness.The analysis focuses on the mere existence of institutions concentrating onrelaxing the selected constraint. Nevertheless, each institutional response isanalyzed with regard to its actual existence - thus activities beyond beingcreated or mentioned in a policy paper. This has been realized by eithersearching for tangible activities of these institutions, e.g. a conference asa facilitating activity of a policy strategy or by analyzing actual �nancialaccounts, thus, actual expenses with regard to the relaxation of a certainconstraint. If such activities can be identi�ed, the institutional response isfurther described as yielding tangible results.The following three subsections present the main contexts of the constraintsidenti�ed in chapter XXXXXX. In each subsection, institutional responsesof ECOWAS are described for each constraint and its respective tangibleactivities are discussed.The following analysis is presented constraint by constraint ordered by threesub-sections representing the main contexts of the constraints: government,overall environment for development,and private sector and investment.

3.2.1 Government

Barriers and costs of doing business: In ECOWAS, the Commission'sPrivate Sector Directorate, headed by the Commissioner for Macro-EconomicPolicy, hold the institutional leadership with regard to the relaxation of thisconstraint. Its main target is the creation of a �competitive, dynamic and di-versi�ed regional economy that is preferred by investors�(ECOWAS, 2011b).Therefore, the mandate includes the issue of governance with regard to re-ducing barriers and costs of doing business. The directorate's activities arebased on an ambitious work program (ECOWAS, 2009), which will be con-sidered for other constraints, too. With regard to costs of doing business,the directorate is strongly involved in facilitating stakeholder meetings onissues such as regional best practice policies and transparent policy makingwithin the region (ECOWAS, 2007b), e.g. facilitation the organization of theECOWAS Trade and Investment Conference (ECOWAS, 2012b). Further-more, lowering information costs and advertisement for regional businessis also part of its work, re�ected by the four ECOWAS Business Forums(since 2007) or the two China Economic and Trade Forums (2008 and 2012)(ECOWAS, 2009). Furthermore, the directorate initiated a process to de-velop a region-wide investment code extending this approach to an invest-

21

ment guarantee/reinsurance agency. Both are supposed to lower costs ofdoing business signi�cantly by facilitating the market entrance of new busi-nesses (ECOWAS, 2008c), (ECOWAS, 04.07.2012). As a consequence of thestrong institutional response, this constraint can be labeled as identi�ed andinstitutionally targeted.High taxation: Regional elimination or harmonization of taxes is one ofthe objectives the Commission's Private Sector Directorate formulates in itsaction plan (ECOWAS, 2007b, e.g. p. 16, 19). This action plan has beenfollowed in two separate directions. First, there is the problem of taxation,transparent �xing of tax rates and transparent tax collection. In order toachieve these aims, ECOWAS cooperates with the private sector establish-ing the West African Union of Tax Institutes (WAUTI) in 2011 (WAUTI,2012b). Several action plans and numerous studies with recommendationshave been written, for example for the International Tax Conference on Tax-ation on 28th February, 2012. However, the actual institutional responseremains weak due to the fact that only Ghana, Nigeria and Mali have fullmembership and eight ECOWAS member state are not involved in any pro-cess. Therefore, this institutional response has yet to yield tangible results(WAUTI, 2012a). On the other hand, taxation is part of the common marketformation, one major objective of ECOWAS. One initiative in this contextis the Movement towards a Common Investment Market (CIM) by the Com-missioner of Macro-Economic Policy. The initiative focuses on harmonizingand lowering the corporate income tax rate. Therefore, a working group on�scal policy harmonization has been established (ECOWAS, 2007b). Thelast update on the process of relaxing taxation as part of the CIM move-ment has been a technical meeting comparing national investment laws andanalyzing how the Community Investment Code (CIC) could be adoptednationally (ECOWAS, 06.04.2011). No change in the tax rate has yet beenaccomplished, but an institutional response exists. Altogether, there is in-stitutional awareness and activities on the institutional level, but the insti-tutional response has lead to limited tangible results.Labor market rigidities: With regard to labor market rigidities, the fo-cus has to be put on activities related to the education sector, as theserigidities depend on the lack of skilled labor - see section 2.2. Already in2003, ECOWAS responded to this constraint by adopting a Regional Pro-tocol on Education and Training (A/DEC.3/01/03) and a General Conven-tion on the Recognition and Equivalence of Degrees, Diploma, Certi�catesand Other Quali�cations (A/C.I/01/03)(ECOWAS, 2007a). These policydocuments did not have a signi�cant impact towards realizing activities inregional cooperation in education apart from conferences and work plans, letalone the development of training curricula. ECOWAS is still working onthe creation of a �Coordinating Unit for the harmonization of educationalprogrammes and quali�cations of tertiary institutions of Member States�(ECOWAS, 08.08.2011). To allow for an educated judgment: besides having

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identi�ed the constraint, low funding and limited sta� hold back any real-ization of regional activities not considering the planning of activities (AU,2009). Moreover, related subjects, such as the ECOWAS Policy on Scienceand Technology (ECOPOST) have not shown tangible results yet despitetheir own creation (ECOWAS, 24.03.2012). Besides these regional attempts,ECOWAS participates in the African Network of Scienti�c and TechnologicalInstitutions (ANSTI) which aims at increasing the supply of skilled humancapital by free movement and higher quality regional research (AFDB, 2009).Summing up, the regional institutions are aware, but as closer analysis re-veals, region-wide responses have been realized only very limitedly.Poor Governance + corruption: In ECOWAS, several institutions, suchas the Commissioner of Political A�airs, Peace & Security (PAPS) or theCourt of Justice focus on poor governance. This section discusses institu-tional responses with regard to transparency and electoral processes, cor-ruption and judicial issues. There exist limitations to the analysis due tothe extensive range of the constraint including numerous governance relatedissues, such as transparency or inadequate property rights.One important step towards the governance constraint - closely linked tothe instability constraint - is the possibility for peaceful and transparentgovernment changes. In this context, the major document is the ECOWASProtocol on Democracy and Good Governance (ECOWAS, 2001, p. 5-13).In Article 1 the constitutional convergence principles are de�ned and furtherdescribed by an explicit mentioning of elections and the role ECOWAS hasto and could voluntarily play in this regard. This protocol seems toothlessdue to the fact that numerous member states were or are currently involvedin political crises linked to power changes. Nevertheless, ECOWAS as a re-gional player is strongly involved in assisting electoral processes (ElectoralAssistance Unit, EAU) and electoral monitoring, e.g. in 2012 by observermissions to Guinea-Bissau or Senegal (ECOWAS, 21.02.2012), (ECOWAS,20.03.2012b). With regard to the limited in�uence ECOWAS has on nationalelections, a new institution, the ECOWAS Network of Electoral Commis-sions (ECONEC), has been established in 2008. Strongly interlinked withthe EAU, is main task is to establish electoral standards for the ECOWASregion. First steps are visible, e.g. a the publication of a comparative studyas baseline study for an ECOWAS protocol on common standards (Hounkpe& Fall, 2011).Among the poor governance constraints, corruption seems to be the mostdi�cult to relax. There is almost no document which does not point out itsimportance, but on a institutional level, little has been achieved. In spring2011, the Network of National Anti-Corruption Institutions in West Africa(NACIWA) has been o�cially established under the Commission's PoliticalA�airs Directorate (Democracy and Good Governance Division). However,its work has not yet resulted in any output except for meetings without anytangible result - the protocols only state that a meeting took place and who

23

attended (ECOWAS, 2010a); (ECOWAS, 05.04.2011). Despite the fact thatregional commitment has been expressed by the speech of the ECOWASCommissioner for Political A�airs, Peace and Security, this institutional re-sponse appears weak (ECOWAS, 05.04.2011).Also important among poor governance issues is the judicial system. The in-stitutional response by ECOWAS to this constraint is the Community Courtof Justice, established by the Protocol A/P.1/7/91 (ECOWAS, 1991). Thecourt seems to have had a di�cult start, since the appointment of judges tookuntil 2001. Nowadays, the court is a functioning ECOWAS body, which de-livered 18 judgments in 2011. Compared to past activities this represents asubstantial increase as from 2004 to 2009 only 27 judgments werde deliveredin total. With regard to governance it has to be highlighted that in 2005,the Court received the power to hear, inter-alia, cases related to violationsof human rights, also by individuals (ECOWAS, 2005).It can be stated that there are activities on the regional level responding topoor governance.State owned �rms: There has been no regional institutional responsewhich could be related to the relaxation of the constraint of state owned�rms. A qualitative review of the constraint leads to the question if on aregional level this is a constraint at all. This is due to the fact that Togoneeds a privatization reform with regard to the agricultural sector, while theonly other country (Cote d'Ivoire), where this constraint has been identi�ed,too, indicates this need for the �nancial sector. In addition, privatizationprogrammes do exist in the region and, furthermore, initiatives such as theECOWAS-TEN consider privatization when analyzing value chain e�ciency.Nevertheless, for the analytical process, it has to be noted that there is noinstitutional response to this constraint.Unsustainable government �nance: The Directorate of MultilateralSurveillance, part of the Macroeconomic Policy Commission, is the majorplayer with regard to stable government �nances. It monitors and evalu-ates the macroeconomic performance of ECOWAS Member States and, withregard to an economic and monetary union, fosters the harmonization of na-tional economic and �nancial policies. Thus, there is a regional `watchdog'for the member's government �nance (ECOWAS, 2011b). No strategy ofsubstituting development aid by other funding sources has been identi�ed.Thus, there is an institutional response in terms of stabilizing and controllinggovernment �nance, while the search for alternative funding to developmentaid has not yet been a focus of ECOWAS policies.Coordination failure: �Given the numerous coordination challenges thata�ict ECOWAS, the ECOWAS Trade and Enterprise Network, known asECOWAS/TEN has been created to coordinate activities of the variousTPOs [Trade Promotion Organizations] in the sub-region� (ECOWAS-TEN,2011). The ECOWAS-TEN in cooperation with the ECOWAS frameworkfor Export Promotion & Enterprise Competitiveness for Trade (ExPECT)

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provides institutional responses to selected coordination failures. For exam-ple, the network organized the ECOWAS trade forum which works on theimprovement of value chains in the agricultural sector tackling problems frominformation inadequacies to transport coordination failures - e.g. transportcartels (ECOWAS-TEN, 2011). Tangible results can exemplarily be shownby the improvements displayed in the report on palm oil production, e.g.adopting common positions on production techniques and benchmark stud-ies (ECOWAS-TEN, 01.06.2012).Inadequate statistics: ECOWAS has identi�ed the low quality of data asa regional constraint. Its institutional response is named ECOSTAT. Thisinstitution provides statistics and data on its website, a tangible result. Fur-thermore, ECOSTAT engages in a program to develop statistical systemsin West Africa and supports national statistical o�ces (ECOSTAT, 2004).In addition to ECOSTAT, the Commission of Macro-Economic Policy hoststhe Research and Statistics Directorate, whose research pillar is responsiblefor the �technical expertise in economic policy coordination, analysis and re-search.� Thus, the ECOWAS internal statistics are also covered (ECOWAS,2012c).

Poor education or education system: Interestingly, the educationstrategies do not focus on structural changes of the national education sys-tems. When analyzing the priority areas, only limited tangible results can beidenti�ed. As has been stated in connection to the constraint of labor marketrigidities, ECOWAS did respond to constraints in education by adopting aRegional Protocol and a General Convention (ECOWAS, 2007a). All pri-ority areas of the ECOWAS education program su�er from limitations infunding and sta�. The priorities are: 1) HIV/AIDS preventive education,2) girls education, 3) teacher training through distance learning, 4) promo-tion of science and technology, 5) technical and vocational education andtraining. With regard to the priority areas 3-5, little to no tangible resultscan be identi�ed apart form policy documents (AU, 2009).2 In contrast,especially the �rst priority area has experienced strong political attentionand, thus, education in HIV/Aids has been adopted down to the nationallevel education strategies (Bundy et al., 2010). Besides AIDS/HIV, girls ed-ucation is another priority area with tangible results. ECOWAS is chairingof the United Nations Girls Education Initiative (UNGEI) West and Cen-tral Africa, which successfully implements girls education strategies (AFDB,2009). Again, despite no visible activities towards system changes, it can bestated that there are tangible institutional responses!Poor health or health system: ECOWAS institutional response withtangible results to this constraint is the West African Health Organization

2Here again, the ANSTI has to be mentioned as a success with regard to the regionaleducation programs (AFDB, 2009).

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(WAHO). With its well-developed priority areas and a comprehensive moni-toring of achievements on its website for each of these areas (WAHO, 2009),it is obvious that ECOWAS does tackle constraints related to health andprovide numerous tangible results.

Infrastructure - General overview: For the infrastructure constraints,a short review of the EBID activities shows that 60% of loans target infras-tructure projects.3 One infrastructure constraint will be discussed in detaildue its importance for ECOWAS: Energy. For the other constraints, someexamples illustrate the tangible results of ECOWAS institutional response tothe infrastructure constraints: Considering the constraint Infrastructure- Air, the EBID realized a partial �nancing of the extension of the Praiaairport in Cape Verde (EBID, 2011, p. 19). Infrastructure - Transport-Water as another constraint can be exemplarily connected to the �nancingof the Dakar Port expansion - a project tackling one of the major bottle-necks of transport infrastructure in the sub-region (EBID, 2009a, p. 5). Thenumerous achievements with regard to the Infrastructure - Communi-cations technology constraint can be illustrated by the INTELCOM 1initiative (also co-funded by EBID). Thereby the INTELCOM 1 projectsled to the construction of direct telephone links between selected ECOWASmember states (ECOWAS, 2007c). With regard to the Infrastructure -Land constraint, the EBID portfolio reveals numerous road projects (EBID,2011, p. 19) and �nancing of a small rail related project, procuring tramtrains in Senegal (EBID, 2011, p. 34). Nevertheless, the ECOWAS Com-mission is strongly engaged in the Fund for Development and Financing ofECOWAS Transport and Energy Sectors (ECOWAS-FODETE), which justrecently published its feasibility study for transport and energy projects. Asthis fund receives substantial funding by partner organizations such as theAfrican Development Bank (AfDB) or the EBID, the feasibility study canbe seen as a �rst step in a continuous implementation process (ECOWAS,20.03.2012a). With regard to the constraint Infrastructure - Sanitationand drinking water, the Water Resources Coordination Unit (WRCU)has an extensive portfolio of activities - projected and implemented (WRCU,2007). A problematic issue here is the poor information policy by the WRCUor nowadays Water Resources Coordination Centre (WRCC) after 2008, sothat the continuation of activities is only visible by indirect information suchas the 400,000 Euro grant of the Agence francaise de développement (AfD) in2010 (ECOWAS, 03.06.2011). However, ECOWAS provides an institutionalresponse to this constraint with existent tangible results, such as the media-tion in large water projects. The limitation that sanitation is not mentionedin the WRCCs targets has to be noted.

3(In the last 5 years of data availability (2006-2010) these has been around US$ 70million.

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The last infrastructure constraint, Infrastructure - Energy, will be dis-cussed in more detail to show how much commitment to infrastructureexists in the regional policies: Especially electricity is clearly adressed byECOWAS. Major policy papers such as the ECOWAS and WAEMU WhitePaper on Access to Energy Services and cooperation such as the energypartnership agreement of ECOWAS and the West African Economic andMonetary Union (UEMOA) highlight the activities targeting this constraint(ECOWAS & WAEMU, 2006b). With regard to tangible results, the WestAfrican Power Pool (WAPP) has to be named as the major institution relatedto energy supply together with the ECOWAS Regional Electricity RegulatoryAuthority (ERERA), which is responsible for regulations of the cross-borderelectricity interconnections in West Africa (ERERA, 2012). The WAPP usesfunds of more than US$ 150 million for its infrastructure investments and,besides its nobel commitments, there is substantial activity with regard toactual construction (WAPP, 2009). The EBID is another player, which alsofunds WAPP projects but, moreover, funds national infrastructure programsat the same time, e.g. grid extension in Benin (EBID, 2011, p. 13). The WestAfrican Gas Pipeline Project (WAGP) is a complement to WAPP. The gaspipeline has been built with some delays but since 2009, gas is supplied fromNigeria to its neighbors. E.g. electricity production in the Takoradi ThermalPower Plant in Ghana is supplied by WAGP's gas (WAGP, 2012). With re-gard to future energy supply, in 2010, ECOWAS established the ECOWASRegional Centre for Renewable Energy and Energy E�ciency (ECREEE)which works on fund raising and regulatory frameworks for renewable energyuse. Furthermore, ECOWAS and EBID are involved in the African Bio-fuelsand Renewable Energy Fund (ABREF) managed by the African Bio-fuelsand Renewable Energy Company (ABREC). This Africa-wide fund operatesmainly in the ECOWAS region due to the strong �nancial and political dom-inance of the ECOWAS countries in its structure (ABREC, 2011). The ideaof a sustainable energy supply is dominant within ABREF's activities, thus,with regard to energy, an innovative perspective is established.It becomes apparent, that the energy constraint receives great attention andstrong institutional responses were created. The activities show �rst region-wide results, e.g. the gaspipeline or interregional transmission lines.

3.2.2 Overall Environment for Development

Culture: Identifying activities targeting the cultural constraint is prob-lematic as it does not relate to the typical culture activities of ECOWAS.ECOWAS activities focus on promoting cultural activities or exporting tra-ditional goods. The constraint "culture" is more related to habits and tradi-tions holding back development in the region. One of the e�orts, ECOWASundertakes in this context, are activities of the ECOWAS Gender Develop-

27

ment Center (EGDC) (Dibba, 08.03.2010). Regarding culture as constraintis quite a radical statement. However it has been identi�ed as constraint andECOWAS is currently not aware of this constraint and it provides only verylimited institutional responses.Environmental risks (internal risks and climate change): The ABRECand the ECREEE, already described with regard to the energy constraint,are part of a climate change mitigation strategy. The ABREC focuses ontons of CO2 savings via its projects. It is shown, that with its currentprojects, ABREC saves almost 70,000 tons of CO2 per year. These activ-ities demonstrate that ECOWAS realizes activities in climate change miti-gation (ABREC, 2011, p. 18). ECREEE activities are less tangible as theyfocus more on awareness creation and regional and national regulatory frame-work creation or changes to national frameworks. With the combination ofboth institutions, ECOWAS realizes an institutional response to this con-straint (ECREEE, 2010). Besides this fast-track proof of tangible results, itis the ECOWAS Environmental Policy, adopted in 2008, which binds mem-ber states to consider environmental principles in all ECOWAS activities.Furthermore, this policy includes an Action Programme for Adaptation toClimate Change Vulnerability in West Africa (ECOWAS, 2011a). For thenext constraint this policy is discussed in more detail.Unsustainable natural resource exploitation: In a Supplementary Act,the ECOWAS Heads of State and Government decided that the ECOWASEnvironmental Policy will be �part of the ECOWAS vision�(Article 4) andthe ECOWAS treaty (ECOWAS, 2008d, Article 20, 2.). Within this policy,four strategic lines for action include amongst others the �Promotion of sus-tainable management of Resources for the improvement of an environment-friendly sub-regional economy.�(ECOWAS, 2008a, p. 19). Examples for tan-gible results resulting from this detailed and ambitious strategy are theAfrican Monitoring of the Environment for Sustainable Development (AMESD)2008-2013 which is implemented in cooperation with the European Develop-ment Fund creating information management capacity and earth observationtechnologies. Another example is the ECOWAS Forest Policy which has beenadopted by the member states in 2010 (ECOWAS, 2011a).Population growth: The population constraint is clearly identi�ed inrecent ECOWAS documents. However, there is no direct institutional re-sponse. It could be argued that health and gender related programmes aregenerally indirectly linked to population growth. Besides, economic growthand more e�cient production tackles a complementary issue with respect topopulation growth, scarcity of resources. Nevertheless, no strategy documentintroduces this argumentation. Thus, ECOWAS seems to lack institutionalresponses with regard to population pressures.

Political instability: Political instability has been identi�ed nationallyand regionally as a major constraint. Not only are there tangible results of

28

ECOWAS, they even serve as a African role model for regional cooperationwith regard to political instability. To name one example, ECOWAS memberstates o�cially established a Standby Force (ESF) in a protocol in 1999 andsince 2005 a Task Force (TF) of 2,773 all ranks has been maintained. Today,the military and police components are judged as fully operational by theAfrican Union. Further institutional responses include strict rules which areapplied with regard to access the regional cooperation. E.g. due to a zero-tolerance for unconstitutional change of government, Niger's government hasbeen expelled from cooperation. Even funding is raised in the region, withmore than 80% of the budget paid by ECOWAS members themselves. Be-sides the intervention possibility, con�ict prevention plays a major role inthe ECOWAS framework. Here, the ECOWAS Peace Fund or the ECOWASCouncil of the Wise provide projects or mediation support to resolve na-tional con�icts. The former is involved in projects such as anti-corruptioninitiatives amongst a wide range of projects, which are supposed to increasepolitical stability (Fisher & Bah, 2010). With regard to the large amount ofECOWAS institutions and actual activities on the ground targeting politicalstability, this constraint is well covered by regional institutional responses.Poor institutions: After the discussion on con�ict prevention measuresto the constraint of political instability, the rebuilding and strengthening ofinstitutions is another major task with regard to improve post-con�ict devel-opment. The focal point of ECOWAS institutional response is the supportto democratic institutions in each member state. In this context, ECOWASprovides institutional responses with regard to electoral assistance and ca-pacity building. Especially election processes and political parties are tar-geted, but also legislative bodies, the Judiciary and the media, as well ashuman rights and anti-corruption institutions. It has been discussed previ-ously (see poor governance constraint), that ECOWAS as a regional player isstrongly involved in assisting electoral process and electoral monitoring. Fur-ther activities are realized with regard to political parties, corruption andthe �ndings of previous peacebuilding missions (ECOWAS, 2010b). Bothprocesses did not yet lead to tangible activities but plans such as the currentstruggle to implement a Forum of West African Political Parties (FOWAPP).Summing up, ECOWAS provides a limited but visible institutional responseto this constraint.

3.2.3 Private Sector and Investment

Diversi�cation: With regard to diversi�cation, the major institutional re-sponse is the ExPECT initiative which targets export competitiveness andthe increase of exports (see the constraint �coordination failures�). As atangible response, in 2012, the ExPECT initiative started advanced trainingand consulting work with regard to value chain development or improvement

29

(EXPORT ACTORS FORUM, 2011). Another institutional response resultsfrom an ECOWAS-EU cooperation, the Economic Partnership AgreementDevelopment Programme (EPADP). Here, one major goal is diversi�cationand increase of production capacities (ECOWAS, 2012a).Low quantity of investment: ECOWAS seeks to install a common invest-ment market. While the common market has not yet been installed, con-crete activities such as comparative studies, investment policy assessment,etc. were are in progress (ECOWAS, 2008b). One tangible result in this pro-cess is the establishment of an ECOWAS Investment Guarantee/ReinsuranceAgency which will be used to channel �ows of foreign direct investment (FDI)in order to increase them (ECOWAS, 04.07.2012),(ECOWAS, 09.05.2012).Besides these activities, EBID itself is a vehicle for investments and, fur-thermore, EBID supports numerous banks and funds in the region (EBID,2011). Thus, altogether, the investment constraint receives limited institu-tional responses by ECOWAS' institutions.Financing (high cost of �nance): With regard to lowering the high costsof �nancing in the region, EBID is the main institution. It provides �nancesfor SMEs, both, directly and by supporting commercial banks with creditline grants. It thus increases the total amount of �nances and provides thepotential to lower �nancing costs (EBID, 2009b). Nevertheless, this is a rel-atively weak and indirect response to this constraint. Therefore, only a weakinstitutional response is identi�ed.Poor quality of investment: Implicitly this constraint has been identi-�ed in the discussion on the common investment market which points outthat FDI is su�ciently high in the oil sector but very low in other sectors(ECOWAS, 04.07.2012). Furthermore, most programs such as ExpPECT,which are designed to value chain e�ciency in selected sectors, implicitly tar-get increasing investments in these sectors resulting from higher pro�tability.Nevertheless, despite the general activities to increase FDI, a strategy or ac-tivities with the objective of channeling investment to di�erent sectors couldnot been identi�ed. Thus, there is no institutional response.Too high public investment (Public/private): After the analysis of theconstraint-related institutional responses of ECOWAS and the observationof the lack of funding in many projects, the lack of activities regarding toohigh public investment is understandable. Furthermore, a qualitative revi-sion of the constraint shows that it is, in general, too low private capitalwhich leads to a too high public investment constraint. This is targeted bythe �low quantity of investment constraint�. It has to be reassessed if thisconstraint needs to be in the analysis at all.Lack of self discovery (innovation): With regard to innovation, EBIDhas a mandate to invest in innovation, but only two projects could be iden-ti�ed in its portfolio, both in response to the constraint: The Tinapa FreeZone Project in Nigeria, a free trade zone partially related to the self dis-covery idea (EBID, 2011, p. 32), and the biotechnology and ICT project

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in an export processing zone in Cote d'Ivoire (EBID, 2011, p. 32), whichis more obviously related to innovation. These small projects are the onlyinstitutional responses identi�ed, but with regard to the urgency of otherconstraints, such as political instability or poor infrastructure, the smallercommitment seems logical.Low demand (due to small domestic market): The low demand con-straint due to a small domestic market is clearly one of the major reasons forECOWAS' existence. Currently institutional responses are mostly coveredby the World Trade initiative: ECOWAS - Aid for Trade. Within this ini-tiative, the ECOWAS Trade Liberalization Scheme (ETLS) is the programtargeting the common market. Some recent tangible results of this programare a capacity building workshop for regional experts on the mechanism andprocedure for ETLS operationalizing (ECOWAS, 26.09.2012) and the open-ing of two pilot border information centers (ECOWAS, 02.08.2011). Thus,ECOWAS is implementing activities by its institutions to relax this con-straint.

3.3 Discussion of Institutional Responses

This section provides an overview of the previous analysis on ECOWAS'institutional responses to the identi�ed development constraints. The head-line already indicates that for most constraints institutions exist in ECOWASthat implement activities to relax development constraints. Table 6.7 in theappendix displays the constraints and the results on institutional responseswhich could or could not be identi�ed (with tangible or limited tangibleresults) or non-existent. For 18 out of the 29 constraints the ECOWAS in-stitutions provide tangible results. Six receive institutional responses buttangible results were hardly identi�able. Only for �ve constraints no institu-tional responses could be identi�ed - all of them not identi�ed by ECOWASinstitutions.Table 3.2 connects the constraints, that were not explicitly identi�ed by

Figure 3.2: Institutional responses to regionally unidenti�ed constraints

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ECOWAS and the results of the institutional response analysis. Two con-straints, despite not being identi�ed in the regional analysis and reports, re-ceive institutional responses, namely inadequate statistics and unsustainablenatural resource exploitation. The remaining �ve are neither identi�ed nordid they trigger institutional responses within the ECOWAS organizations.With regard to the analysis in the previous section, only population growthseems to reveal an awareness-problem within ECOWAS. For the other con-straints their respective discussions indicate either strong indirect responsesor a questionable basis to consider this constraint for this analysis.Thus, concerning the question if ECOWAS provides institutional responsesto the regional constraints, the answer is a de�nite yes except for the popu-lation constraint.

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Chapter 4

Conclusion: Regional

Responses to Members'

Constraints

With regard to the basic research question of this paper, the answer hasto be: Yes, ECOWAS addresses national constraints in its structure, and,furthermore, it provides tangible results with regard to the relaxation of theconstraints. Only for one constraint, population growth, do the institutionalresponses reveal a necessity for improving ECOWAS activities. This is a verypositive, even `surprising' result with regard to the ECOWAS structure.Several further issues need to be addressed in this context: First, the analy-sis focuses on the actual existence of ECOWAS institutions and institutionalactivities with regard to the constraints. There has been neither an analysisof the e�ectiveness of the activities nor of their su�ciency. What does thismean? With regard to the poor development performance of the ECOWASmember states, e�ectiveness and su�ciency of the responses are question-able. As each constraint would have to be analyzed intensively to allow for areasonable discussion of e�ciency and su�ciency, an in-depth analysis wasbeyond the scope of this paper. This is one possibility for further research.Second, the actual presentation of ECOWAS in the literature and its webappearance did not allow for an easy analysis of its institutional responses,activities, and results. E.g. information provided by the commission andother institutions was mostly outdated, links to �new� information oftenlead to a dead-end. This leads to two further discussion points: The nonex-istence of a clear, comprehensive presentation of structure of the ECOWASinstitutions and the problem of donor dependency. The former has beensummarized in the word `informational rag rug' and one of the results ofthis paper is to reveal the urgency for ECOWAS institutions to provide anaccessible picture of the organization. The latter has been identi�ed by theanalysis of the institutional response, the strong involvement of donors in

33

almost all activities. Clearly, this plays an important role in creating this al-most chaotic ECOWAS structure. It should be part of a donor's motivationto develop a regional community endowed with an accessible structure.Third, the poor connections between the regional policy documents or theanalysis and reports of the World Bank and the IMF need to be highlighted.The national strategies should be aligned by with regard to design and pro-cedural method(s), preserving the country-speci�c focus of each developmentstrategy, but allowing for an easier transnational assessment and compari-son.In addition, the paper's approach has to be critically reviewed with regardto analytical limitations. For a more in-depth basis of information, thedesk review should be supplemented by qualitative interviews with regardto the national constraints, the regional constraints and the institutional re-sponses.1

Second, the analysis of the institutional responses clearly points to a neces-sary review of the selected constraints. Some are too imprecise, too broad.One example is the governance constraint, which could be separated intoconstraints such as corruption, property rights, transparency, etc. Some cat-egories seem to be negligible, such as state owned �rms. This should bereconsidered. With regard to constraints, it remains problematic to sumup constraints over di�erent countries. The range within constraints, e.g.education, can reach from the rebuilding of the entire education system inpost-con�ict states such as Guinea-Bissau to an improvement of educationfor the tertiary sector in Cape Verde.

Despite the analytical limitations, this research presents the surprisingresult that ECOWAS provides institutions and certain activities properlylinked to regionally and nationally identi�ed development constraints. But itis apparent that research and policy activities should now change focus fromcreating institutional responses to interlinking them, implementing them inan e�ective manner and involving major partners in a structured, transpar-ent process of ECOWAS activities. Institutions exist, their usage seems tobe an issue.

1Depending on the interest in such a more in-depth qualitative analysis, this could bea next step in improving the informational basis.

34

Chapter 5

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35

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47

World Bank. (2009d). Country partnership strategy for the republic of capeverde for the period fy09-12: Report no. 47750-cv. Retrieved 08.06.2012,from http://www-wds.worldbank.org

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48

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Chapter 6

Appendix

6.1 Collecting National Binding Constraints - a Lit-

erature Review

6.1.1 Republic of Benin

�Benin will not be able to create wealth and shrink the boundaries of povertyunless numerous development constraints are overcome.� (Government of theRepublic of Benin, 2011, p. 27). In its third Poverty Reduction Strategy Pa-per (PRSP III), also called "La Stratégie de Croissance pour la Réductionde la Pauvreté," 2011-2015, the Government of Benin highlights the mostimportant constraints to development for the Beninese society. One majorobstacle is the inadequate infrastructure with regard to energy, communi-cations, and transportation - the latter one constraining the neighboringcountries due to Benin's transit status. The resulting costs to developmentare engraved by governance problems, especially limited implementation ca-pacity, and an unfavorable business environment with insecure land tenure,and corruption. This ine�ciencies result also to the need to strengthen thestability of the macroeconomic framework and to improve the internal e�-ciency of the education system. As business is repressed by these constraints,the economy remains in a state of low diversi�cation jeopardized by the riskof external shocks. With regard to the �nance sector, it is the lack of appro-priate �nancing, both public and private, that characterizes the economy'sproblem. As external factors, climate change and an uncontrolled populationgrowth are named, whereby for both challenges, solvable, linked constraintscan be described. With regard to climate change, mitigating is preciselyimportant, but �rst, there has to be an increase in exploitation of availablenatural resources which still remains weak. Thereby it is the infrastructureconstraint together with poor governance that does constraint the economyhere and not yet the impacts of climate change. For the latter, again, it isgovernment policy, e.g. in the education system - that constraints the lift-

50

ing of an uncontrolled growth rate (Government of the Republic of Benin,2011, p. 27-30). In World Bank country economic memorandum a growthdiagnostic study found similar constraints. Besides de�ning more explicitlythe infrastructure constraints, identifying the port as a critical infrastruc-ture NADELÖHR, the poor tax administration (implementation capacity)and an absence of an innovation potential of �rms (linked to the educationand business environment) are integrated into the list of constraints (WorldBank, 2009a). Other recent studies or reports such e.g. by the World Bank(2011a) or the OECD (2011a) point out similar constraints.

6.1.2 Republic of Burkina Faso

Politically, Burkina Faso has restabilized after its short crisis in 2011 OECDet al. (2011). Therefore, the most important constraints to growth elabo-rated by the Burkina Faso Government remain �rst on the schedule. Theseconstraints have been published in 2010 in the �Stratégie de croissance ac-célérée et de développement durable (SCADD) 2011-2015�. In this strategypaper, the major constraints to growth are listed: poor access to energy,low private capital, too low diversi�cation of the economy, intermediation ofthe �nancial system, overall government e�ciency - especially with regardto property rights enforcement, weaknesses in the justice system, high ad-ministrative costs, and general e�ciency - and �nally coordination issues,especially in the cotton and gold sector Ministère de l'Economie et des Fi-nances de Burkina Faso (2010). With regard to the constraints, the mostbinding to development at present are governance reforms, as the IMF putsit: �the recent unrest has highlighted the importance of further governancereforms�(International Monetary Fund, 2011a, p. 7). Two World Bank doc-uments were reviewed to safeguard the �ndings, pointing mostly to the samemajor constraints. In addition, these documents provide some additionalaspects: First, there is the more detailed infrastructure constraint, that doesnot only focus on energy but clearly de�nes air connectivity, the rail net-work and the access to ports as further constraints. The coordination issuesare also supplemented with the problematic situation in the transport sectorbecause the state is not yet able to break down a cartel-type rotational ba-sis in the trucking industry which could lower transport prices signi�cantly.Another constraint is the low diversi�cation of the economy and thereby thedependence on agriculture and with this on environmental risks World Bank(2009b). Next, the poor intermediation of the �nancial system is properlyde�ned as the �nancial institutions' lack of expertise in Small and Medium-Sized Enterprise(SME) lending. One additional constraint is here the weakmanagement capacity of SMEs, notably in keeping appropriate accountingand developing credible projects. This will be put under human capitaldevelopment as it is this capacity resulting in the constraint World Bank(2011b). Other studies provide similar lists of constraint, e.g. World Bank

51

(2010a) or OECD et al. (2011).

6.1.3 Republic of Cape Verde

In 2011, the Government of Cape Verde published its �Programa do Gov-erno 2011-2016� (Government of the Republic of Cape Verde, 2011) in whichthe government describes constraints to its �route of an Economic Trans-formation Strategy�, which has been de�ned as framework for its devel-opment in the Growth and Poverty Reduction Strategy Paper (GPRS) in2008 [p. 50](Government of the Republic of Cape Verde, 2008) One majorconstraint on the islands is infrastructure, especially the high cost and ir-regularity of inter-island shipping and high energy costs. Both constraintheavily poverty reduction and economic development. The government rec-ognizes the reduction of unemployment as one major aspect for development.Constraining are in this aspect the human capital, which needs to be morequali�ed, and the overall business climate, which will be reformed throughbetter governance. The government points out that ine�ective administra-tion is currently a major constraint. For Cape Verde, the transition to a mid-dle income country involves the necessity for the government to create newsources of funding. This is, following the government, one major constraintto the whole development strategies, and data show that this is reasonable,as government �nances still dependent to 45% on ODA (World Bank, 2012e)and remittances and ODA represent together one third of GDP. Despite wellsuited government action, this constraints has been highlighted also in 2012,by an IMF report (International Monetary Fund, 2012a). Finally, the re-liance on import constraints the economy as it is exposed to vulnerabilityof certain prices of import goods, such as oil or food in general (Govern-ment of the Republic of Cape Verde, 2011). The obvious constraint thatcannot be changed, only with a lot of e�ort, is Cape Verde's insularity and,thereby, its small population and narrow domestic market. This papers inte-grates this constraints in the discussion on improving infrastructure, as doesthe World Bank in several of its studies, e.g. (World Bank, 2009d, p. 13).Closely related to its geographical position is the climate change problem.With the National Environmental Action Plan (PANA) in 2007 the countrystarts reacting on the external constraint climate change but also to home-made environmental problems, especially water resources. Both constraintsremain e�ective. A study by the African Development Bank (African Devel-opment Bank & African Development Fund, 2009a), published shortly beforethe Programa do Govern 2011-2016, backs the �ndings that have been elab-orated also in the GPRS-II (Government of the Republic of Cape Verde,2008). Both earlier documents highlight some additional aspects within thede�ned constraints, such as the poor diversi�cation of the economy, labormarket rigidities, high taxes, infrastructure problems regarding ports andtelecommunication, and shortage and high cost of �nancing. The only con-

52

straint that does not describe the above de�ned constraint in more detail arethe shortage and high costs of �nance, which will be left out following thecurrent results of the Doing Business survey showing a strong performanceby Cape Verde in lifting this constraint (World Bank, 2012a) and the positivejudgement in the 2010 Progress Report by the IMF (International MonetaryFund, 2010a, p. 57).

6.1.4 Republic of Cote d'Ivoire

In 2010 and 2011, Cote d'Ivoire faced a severe post-election crisis almostleading to civil war. A death toll of 900, thousands injured, and around onemillion displaced have been the results coming hand in hand with a massivedownturn of the economy. Due to this recent turmoils, Cote d'Ivoire has tobe analyzed as a post-con�ict country, such as Liberia. Therefore, the ma-jor constraint remains the stabilization of the country with regard to peaceand security. For 2012 an estimated moderate recovery growth of around6% reveals that stabilization is partly realized and is expected to continue(OECD, 2011b, p. 3)The o�cial Strategy For Relaunching Development and Reducing Poverty,the PRSP, orders the main constraints to growth to three steps of develop-ment. The one major constraint even before the crisis in step one is politicalstability as the basic need for any development. The second step includessome more constraints to lift, namely the low diversi�cation of the econ-omy, the height of external debt and the need for a debt relief, coordinationproblems due to disorganized production channels because of the long cri-sis period, and �nally the problematic business climate which detains directforeign investment and foreign companies. For the next development step,number three, so the third order constraints, the strategy paper clearly high-light infrastructure and governance to maintain a sustainable growth level(Government of the Republic of Côte d'Ivoire, 2009, p. 85-89). In the advi-sory note on the PRSP, the IMF and the World Bank point out some similarconstraints but with a narrower focus. Political stability remains as top con-straint but it is the coordination problems - especially in the cocoa, cashewand cotton sector - and the urgent need to increase private investment thatare highlighted as major constraints World Bank (2010b). These constraintsare supplemented in the World Bank Country Partnership Strategy by co-ordination problems in the oil and gas sector, severe governance problemsconstraining business climate and the �nancial sector, the electricity supply,and the generally poor infrastructure World Bank (2010b).The documents available after the 2010/2011 crisis highlight comparableconstraints to growth as the previous analysis. This points to the fact thatthe basic economic constraints did not change much despite the clear em-phasis on political stability. The OECD et al. (2011) names social unrestsuch as repeated strikes in several economic sectors and the unwillingness of

53

the private sector to invest during an election period as a major constraintalong with two others: a decrease in primary sector activity and limitedelectricity supply with rolling blackouts (OECD, 2011b, p. 6). The lattertwo constraints refer to the concentration on two cash crop products in theprimary sector (co�ee and cocoa) and the problematically low level of infras-tructure - here with the spotlight on electricity. One more point mentionedis the urgent need to improve governance with regard to Doing Business, asthe World Bank's report on this issue classed Côte d'Ivoire 169th out of 183countries (OECD, 2011b, p. 13).N'guessan (2012) supports this analysis de�ning infrastructure, namely com-munications, electric power generation, and water production and �soundmanagement of public a�airs�N'guessan (2012, p. 473) as major constraintsnext to political stability. The problems in the management of public a�airsare further de�ned as low level of governance e�ectiveness and, furthermore,a wide range of problematic issues such as property rights, contract enforce-ment or the transparency of the judicial system N'guessan (2012).Currently a National Development Plan (PND) is �nalized by the 2011elected government, taking into account the PRSP and restating the mainconstraints to growth: political stability, business climate di�cult, poor pub-lic �nance management, constrained access to credit, low agricultural pro-ductivity (here: coordination problem), governance in general problematic,and as part of governance but highlighted in the PND the poor performanceof the national statistical apparatus Government of the Republic of Côted'Ivoire (2012).

6.1.5 Republic of The Gambia

In 2011, the Gambian government o�cially published the Programme forAccelerated Growth and Employment (PAGE) 2012 -2015, a succession doc-ument of the PRS I and II. The analysis of constraints of the governmentresults in a list of ten major constraints to the state's development (Gov-ernment of the Republic of The Gambia, 2011, p. xvi-xvii). Next to typicalconstraints, such as inadequate infrastructure, macroeconomic management,limited access to credit for the productive sector and coordination problemsin the �nancial sector or governance issues, this list highlights one interestingcultural criticism, which could not be found in any other document. Negativeattitudes, cultural practices and perceptions are named a clear constraint todevelopment in this analysis.1A second specialty can be found in the discus-sion of ine�cient governance, as the programme explicitly points out poor

1In more detail, these constraint is further de�ned as constraints to women's and youngpeople's voices, male-biased inheritance and land tenure systems, kinship obligations, fac-tionalism, fatalism, and backward bending tendency to compromise (Government of theRepublic of The Gambia, 2011, p. 41). Despite the question who judges here, this analysisaddresses an aspect, culture, which is generally left out when discussing development.

54

governance in civil society organizations and their focus on donor-driven ac-tivities that �relegates local priorities into oblivion�. By this constraint, theanalysis includes a mostly unnamed aspect, the high dependency of WestAfrican governments and societies on aid by international donors.2Besidesthese quite special highlights, the clear listing of constraints and the elabo-rateness of their description eases their presentation in this paper. Besidesthe six constraints named above, it is an ine�cient agricultural production(linked to governance and infrastructure), an inadequate health system, risksby natural and man-made disasters, and a lack human capital which are theremaining constraints on the list (Government of the Republic of The Gam-bia, 2011, p. 36-43).3 In comparison with the prior PRS II, the constraintsare now more explicitly described but they can still be included into oneof the �ve priority areas of the PRS II Government of the Republic of TheGambia (2006). In general, other studies point to the same constraints aslisted in the PAGE: OECD (2011c), United Nations Development Program(UNDP) & Government of the Republic of The Gambia (2010), World Bank(2008c),World Bank (2010d), International Monetary Fund (2012c). Themost recent UNDP report (United Nations Development Program (UNDP)& Government of the Republic of The Gambia, 2010) highlights governanceas major constraint and provides a new constraint, the narrow market whichholds back especially the service sector - this constraint can be found alsoin World Bank (2008c, p. 12). The IMF on the other hand focuses more onthe �nancial challenges for Gambia to implement the PAGE facing a heavydebt burden and in general a tight �scal situation (International MonetaryFund, 2012b).

6.1.6 Republic of Ghana

Ghana is the second richest economy in the ECOWAS region (World Bank,2012e) and with the discovery and now beginning exploitation of oil onGhana's shore, the country has achieved middle income country status in2010 (World Bank, 2012e). There is a long line of development related strate-gies in Ghana, whereby the Poverty Reduction Strategies are now replacedby a Long- and a Medium-Term National Development Policy Framework.For the medium term, the National Development Planning Commission pub-lished the Ghana Shared Growth And Development Agenda (GSGDA) forthe years 2010-2013 (Government of the Republic of Ghana, 2010b, 15-

2In Gambia, ODA represents almost 80% of total government expenses and net loansin 2010 (calculation based on World dataBank (World Bank, 2012e) and the BudgetStatement 2011 of the Gambian government Government of the Republic of The Gambia(2010)).

3In the comparison some of the constraints had to be split up as they covered morethan one category of constraints, e.g. governance which involved coordination problems,weak institutions etc.

55

16).4 In this recent policy framework, six key development challenges aredescribed. First of all, it is governance issues that is constraining developmentin Ghana. Besides limited e�ciency of administration it is corruption, trans-parency, and accountable governance which are highlighted. Interestingly,the second constraint are socio-cultural dynamics, including public morality,attitudes, behaviors, conduct, responsiveness, and time-consciousness thatare constraining the e�cient functioning of the state , its institution and theeconomy. Another key challenge is the heavy reliance on external �nancialsupport and foreign direct investment which are identi�ed as the principalsources of funding for the public and the private sectors. The fourth an �fthconstraint are external factors, namely climate change and a decrease of ex-ternal demand due to the global crisis. The last challenge is more a futureconstraint as the Government underlines that changes due to oil exploitationwill heavily a�ect donor engagement which could negatively a�ect develop-ment in the transition time - increasing government revenue and decreasingaid �nancing. Following IMF and World Bank this economic transition canrepresent a serious constraint if not properly �nanced and governed (WorldBank, 2011i, p. 2),Aydin (2011). With ODA at around 30% of central gov-ernment expenses (World Bank, 2012e) this is a reasonable challenge butGhana is already relaxing this future challenge through intense policy work,e.g. the Ghana Aid Policy and Strategy Government of the Republic ofGhana (2011). The Government analysis of constraints is backed by the�ndings of a Growth Diagnostics study of the African Development BankLejárraga (2010). The last challenge is de�ned here as a potential coordi-nation problem of government �nance as investment is too strongly directedto resource-seeking activities, especially the oil sector. Next to the similarconstraints - culture is not mentioned in this report - two further constraintsare identi�ed. First, there is an infrastructure constraint, in this study it isair connectivity. Another government document also points out infrastruc-ture as a constraint to further development (Government of the Republic ofGhana, 2010a, p. 33), whereby a joint IMF and World Bank statement pointsout that infrastructure stands mostly for the road network and water andsanitation supply (World Bank, 2011i, p. 4,8). Second, low diversi�cation ofthe economy. This last constraint is strongly interlinked to ine�cient gov-ernance and labor market rigidities which do not allow scaling up economicactivities e.g. through penetrating international markets.

6.1.7 Republic of Guinea

�The presidential election of November 7, 2010 marked the beginning ofGuinea's return to constitutional order following a December 23, 2008 coup[...](Government of the Republic of Guinea, 2011, p. 14).� In 2011 the Gov-

4The long-term Plan consultations still continue

56

ernment of Guinea published its PRSP 2011-2012, the successor of the PRSP2007-2011. Within its three pillars, the government prioritizes the con-straints to overcome for the country's development. First, internal securityhas to be reestablished in the unstable democracy together with �rst e�ortsto improve governance or even install necessary institutions. Second, thestate has to be rebuilt or built, after decades of mismanagement. Here, themajor constraints are infrastructure and the focus on building an economicbasis relying primarily on the mining sector and agriculture (Governmentof the Republic of Guinea, 2011, p. 55-56). The latter points to constraintsin security, governance and infrastructure but also to coordination problemsto allow the reconstruction of these important economic sectors. Third, theaccess to basic social services, education and health on �rst priority, is thenext step in development(Government of the Republic of Guinea, 2011).Due to the political unstable situation, major constraints did not changefrom the PRSP 2007-2011 to the recent version (Government of the Repub-lic of Guinea, 2007). The picture for Guinea with the utmost importance onlifting the internal security constraint is pretty clear. Additional reports andstudies show the same constraints and prioritization, each one underliningthe importance of improvements in governance (World Bank, 2008a), (In-ternational Monetary Fund, 2010b), (International Monetary Fund, 2012e),and (International Monetary Fund, 2012d).

6.1.8 Republic of Guinea-Bissau

�The African Development Bank Group and the World Bank Group jointhe African Union and the Economic Community of West African States(ECOWAS) in condemning the military coup in Guinea-Bissau[...]�(WorldBank, 19.04.2012). Political stability is the outstanding constraint to Guinea-Bissau's development: The country has not yet experienced one presidentserving one whole �ve year term. Besides this clearly most binding con-straint, the typical constraints bind in Guinea-Bissau, too: Inadequate andpoorly maintained infrastructure, poor governance, low human capital dueto deteriorated health and education system. Financing of government ex-penses and sustainable budgeting are also constraints. Furthermore, thecountry does not provide su�cient �nancing to the private sector, also dueto the lack of adequate institutions in the �nancial system. Therefore, theeconomy remains oriented on agricultural production, highly volatile to ex-ternal price changes. In more detail, the IMF highlights the macroeconomicstability and the necessity of diversi�cation, as almost all export rely on onesector, the cashew sector (International Monetary Fund, 2011b). Furtherstudies are in line with the found constraints, e.g. (International MonetaryFund, 2011c), (World Bank, 2011g)

57

6.1.9 Republic of Liberia

Liberia is a post-con�ict country. It still recovers from civil war that endedonly nine years ago in 2003 and that ruined a large part of the country's in-stitutions and economy. In 2008, Liberia's Government published a PovertyReduction Strategy de�ning the major steps, and thereby constraints, todevelopment. The �rst major constraints are roads, or more general: basicinfrastructure. Rebuilding has started but poor maintenance and destructionof the war let this constraint remain �rst priority. Second, the exploitationof natural resources (agriculture and mining) is prioritized by the govern-ment, which is linked to the infrastructure constraint but includes coordina-tion problems of the government and general governance constraints such asgovernment capacity and e�ciency. The third step involves the constrain-ing human capital and health status in the country, thus, the rebuilding ofboth systems to restore the country private and public professional capac-ity (Government of Liberia, 2008), (African Development Bank & AfricanDevelopment Fund, 2008). What remains the basis of Liberian developmentand, thus, the basic challenge for the Liberian state is the creation and sus-tainment of political stability and internal security (Werker & Beganovic,2011). The tense atmosphere at the 2011 elections underlined that peaceand thereby the state remains fragile. A second version of the PRS is ex-pected for June 2012 (World Bank, 2012b). Despite some steps towardslifting the major constraints, a recent summary of the PRSP I objectivesand other recent analyses indicate that the main constraints named abovewill keep their position as main binding constraints (Government of Liberia,2012) , (IMF, 2012), (World Bank, 2011c).

6.1.10 Republic of Mali

Mali is currently the most fragile country within ECOWAS: In March 2012,a successful coup d'état left Mali in a state of disorder, leading to the dec-laration of independence by the northern region of Mali and the suspensionof most development organizations activities, e.g. World Bank (22.03.2012).Therefore, the one major constraint that has to be highlighted is the re-gaining of peace and internal security throughout the country. Besides thecurrent turmoil, other major constraints to development will remain urgentor even more urgent to be lifted, when the basic constraint of political sta-bility is regained. For this, this paper displays a list of �second� binding con-straint. Recently, the Government of Mali published the �Cadre Stratégiquepour la Croissance et la Réduction de la Pauvreté (2012-2017)�, its latestGPRS. Critical constraints to economic development and poverty reductionare found in infrastructure, human capital formation, coordination problemsto strengthen the productivity in agriculture, and good governance. Infras-tructure constraints are analysed not only in national but in the international

58

context due to Mali's landlocked position. Especially the road network withpotential access to major regional ports is seen as crucial to any develop-ment success. In agriculture, all studies see the most promising potentialfor development with regard to both, poverty reduction and growth accel-eration. Main problems are here interlinked to governance, infrastructureand human capital formation but as another constraint coordination prob-lems in this sector need to be listed. Governance as always covers a longlist of necessary reforms, in this case with the vocal point on transparency,corruption, and implementation capacity. Due to its low diversi�cation, theinternational economic downturn and the respective price volatilities have asigni�cant in�uence on Mali's economy - whereby currently high gold andcommodity prices provide a short-term plus to development. With regardto government �nancing it is not only the risk of price volatility of a limitedamount of goods produced, but the general macroeconomic framework thathas recently partly stabilized which will constraint development again afterthe political crisis.5 External factors in this analysis are risks due to climatechange and the high population growth (Government of the Republic ofMali, 2011). With regard to infrastructure, the Joint Assistance Strategy ofMali's development partners add constraints in the telecommunication andthe water sector, the former with regard to economic development, the latewith regard to both water usage for irrigation and access to potable water(Government of the Republic of Mali, 2008a). The �Strategie de Croissance2008-2012� integrates a stronger focus on structural reforms to lift constraintfor the private sector highlighting costs of doing business and governancewith regard to the creation of a more e�cient institutional framework andcapacities. (Government of the Republic of Mali, 2008b, p. 12). Additionalstudies indicate similar constraints (OECD, 2011d), (World Bank, 2011h),(World Bank, 2011d), International Monetary Fund (2011d), Government ofthe Republic of Mali & International Monetary Fund (2011).

6.1.11 Republic of Niger

With the exception of the two post-con�ict countries Sierra Leone and Liberia,the Republic of Niger is the poorest country in the ECOWAS. The main fac-tor and in the mean time constraint to development is Niger's exposionvul-nerability to climate conditions, as highlighted in the Government's Acceler-ated Development and Poverty Reduction Strategy 2008 - 2012 (Governmentof the Republic of Niger, 2007). Since 1960 the average rainfall has been de-teriorating and the years 2009 and 2011 show major droughts in the country,heavily a�ecting negatively development achievements. Climate change canbe identi�ed as an external factor in this main constraint but unsustainablemanagement of natural resources is another major part. Therefore, infras-

5The main argument in this case is the suspension of donor activities representingaround 75% of government expenses in 2009 (World Bank, 2012e).

59

tructure with regard to the water supply (here more irrigation), the manage-ment of natural resources and governance can be identi�ed as constraints.In this context, the problematic low diversi�cation of the economy takes itsstand, which relies only on the mining sector (uranium, oil) and agriculture.6

Governance is a constraining issue not only with regard to natural resourcemanagement. The government lists transparency, e�ciency, the guarantee-ing of individual and collective freedoms, �ght against corruption, injustice,and impunity. Furthermore, with regard to the low diversi�cation and oneof the last ranks in Doing Business indicators worldwide, substantial reformsneed to be undertaken to improve the situation. Infrastructure is anotherkey constraint for the landlocked country, with the study pointing out hightransport costs due to an inadequate road system. In general problematicis the situation with regard to the education and the health system. Here,MDG targets are far from being reached and especially the low performancein education holds back not only human but also economic development. Es-pecially with regard to education of woman, the report identi�es culture andtradition, also a impressive richeness of the country, as cause for limited hu-man capital potential of the country. A constraint that is new on the agendais the raid population growth, which leads to a doubling of the populationevery 21 years. Niger has to lower this rate to allow an increase in per capitaincome Government of the Republic of Niger (2007). An IMF study de�nesfurther the infrastructure constraint, identifying also transportation facil-ities but, furthermore, highlights power and telecommunications networksas additional key constraints to growth and poverty reduction InternationalMonetary Fund (2008). With regard to the improvement of the businessenvironment, the World Bank underlines high taxation and limited access tocredit as a binding constraint to private sector development (World Bank,2012d, p. 5-7), EIF (2008). Additional reports and studies result in the sameconstraints, e.g. International Monetary Fund (2012f), (World Bank, 2010c,p. 8-9), World Bank (2008b), World Bank (2007a).

6.1.12 Federal Republic of Nigeria

Nigeria possesses 53% of ECOWAS' population and 65% of ECOWAS' GDPis produced in Nigeria . Clearly, this country dominates economically andpolitically the regional union. Despite its economic and political power,Nigeria remains a lower middle income country with severe problems regard-ing its development potential. In its vision 20: 2020, the Government ofNigeria names the most important constraints to economic growth: Infras-tructure (road, rail, air, water, power supply), �scal and monetary policycoordination, macroeconomic instability (exchange rate volatility + �scal

6It is important to note that for inclusive growth mining can only partly and in mid-term increase overall development by providing funds to the government which establishesprevention measures with regard to unfavorable climate conditions.

60

dominance with crowding out), corruption, weak institutions and regula-tory de�cit, poor political continuity, strong dependence on the oil sectorfor government and the whole economy, �nancial intermediation (High in-terest rates, SMEs restricted access to credit, internal security problematic,environmental risks especially regarding intermittent droughts Governmentof Nigeria (2009). This list reveals, that Nigeria struggles with the basicinstitutional framework a state has to provide for a functioning develop-ment process. Although Nigeria is not a post-con�ict country, security andstability remain constraints pointing to other problems in the institutionalsetup, e.g. corruption. Nevertheless, the constraints in infrastructure, accessto credit for SMEs, and innovation request also immediate need for politi-cal action. In a growth diagnostic study World Bank (2007b), World Bank(2010e) the constraints are prioritized, whereby �enhancing access to and costof physical infrastructure� (World Bank, 2007b, p. 44) is the �rst, the ad-dressing of macroeconomic instability, especially, the �oil revenue volatilityand microeconomic risks from corruption and related weaknesses of insti-tutions and regulations to guide investment behavior�(World Bank, 2007b,p. 44). Another study growth related Treichel (2010) underlines the im-portance of these three constraints: infrastructure, access to �nance, poorinvestment climate and slow bureaucratic procedures but integrates two newconstraints, human capital with regard to skilled sta� and import bans andin general restrictive trade [p. 6]Treichel (2010). Some additional work doesnot provide further or an exclusion of constraints World Bank (2011e), WorldBank (2009c), although some emphasize �rst achievement regarding the lift-ing of the infrastructure and business environment constraints InternationalMonetary Fund (IMF) (2007).

6.1.13 Republic of Senegal

Presidential election in spring 2012 �nally led to a peaceful change of powerin Senegal. Therefore, there is no need to amend the list of majors growthconstraints with a new political stability problem. The Document of Eco-nomic and Social Policy Ministère de l'Economie et des Finances (MEF) dela Republique du Senegal (2011) is the basis of this analysis, as it is themost speci�c o�cial subdocument of the general Growth and Poverty Re-duction Strategy Paper. The major constraints are infrastructure especiallywith regard to transportation, low private investment that depends stronglyon remittances and foreign aid, a restricted access to �nance especially forSMEs, and �nally the general need to strengthen the role of private sectorpointing to coordination problems in agriculture but also in services andindustrial activities (Micro risks of governance: weak business climate, cor-ruption, etc.). A speci�c growth analysis of the Senegalese government -unfortunately not applying the HRV approach named after Ricardo Haus-mann, Dani Rodrik and Andrés Velasco - from 2008 Ministère de l'Economie

61

et des Finances (MEF) de la Republique du Senegal (2008) had similar gen-eral constraints infrastrucutre, private investment, and business climate butsome details di�er or are more speci�c: constraining infrastructure is espe-cially energy and water and the business climate depends strongly on highlabor market rigidities, ine�cient administration, a weak judiciary system,and problems with property rights enforcement.This list of major constraints can also almost similarly be found in an anal-ysis of the African Development Bank Banque Africaine de Développement& Fonds Africain de Développement (2010). One small supplement is thelow diversi�cation of the Senegalese economy and, thereby, its dependenceon global prices.

6.1.14 Republic of Sierra Leone

Major constraints: Political stabilization, Infrastructure, Coordination prob-lems, Productivity of the agricultural sector, etc.Sierra Leone has stabilized after the civil war ended in 2001. Therefore, themajor constraints are only political stabilization but include today furtheraspects of development, such as low investment, infrastructure, and produc-tivity concerns. The latter can be found in the o�cial Poverty ReductionStrategy of the Government named �Agenda for change�. This strategy doesnot only include these three constraints but emphasizes also good governancewith regard to the business climate as major constraint to development. PRSSierra Leone 2008-2012, the Agenda for Change Government of Sierra Leone(2007). The Agenda of Change is based strongly on one Growth Diagnosticstudy, which discusses in detail the problems of the still fragil state. First, itis again political stability that is mentioned but in line with the lifting of thismajor constraint, it is more the implementation capacity that holds back theeconomy. This restraint capacity is especially seen in government institutionsthat are thereby not able to create a framework for private sector activities.The reports highlight here coordination failures regarding the agriculturaland mining sectors, general governance problems, such as rights to prop-erty, poor stewardship of natural resources, and corruption, and the poormaintenance of the infrastructure. Another constraint clearly pointed out isthe domestic lending which does not function do to intermediation problemsChikezie (2012). Further studies and reports �nd similar constraints, such asthe overview of the African Development Report OECD (2011e), the JointAssistance Strategy led by the African Development Bank African Develop-ment Bank & African Development Fund (2009b) or a Growth DiagnosticsStudy of DFID, the Department of International Development and DACO,the Development Assistance Coordination O�ce of the Government of SierraLeone, Phillipson (2008).

62

6.1.15 Togolese Republic

In 2010, the World Bank published a growth diagnostic study elaboratingthe major binding constraints to this West African country Lundstrom &Garrido (2010). Infrastructure is only partly binding, here with a focus onelectricity supply. Nevertheless, other World Bank documents still pointto infrastructure as a major constraint, thus, especially transport infrastruc-ture remains a constraint in this analysis (World Bank, 2012c, p. 19), (WorldBank, 2010f, p. 1). Furthermore, corruption and governance indicators showsevere problems but growth picked up without amelioration of any of the gov-ernance indicators. Thus, despite exhibiting severe constraints, governanceis only a subordinated constraint. Coordination problems in the phosphatesector closely linked to privatization are holding back one of the main growingsectors of the economy - here the recent IMF report identi�ed the relaxingof this constraint (International Monetary Fund, 2011f, p. 5-6). But whenprioritizing the areas of political reforms, it is coordination problems in agri-culture which are binding, especially in the cotton sector. With regard todoing business and the private sector, there are major binding constraintscompared to regional benchmarks in starting a business and property rightsprotection. Currently not clearly binding is the political stability in Togo,but it is classi�ed as at least problematic regarding the last political turmoilsafter each election Lundstrom & Garrido (2010). These �ndings suit the con-straints identi�ed previously in the Togolese Government's Full PRSP, whichis closely linked to the achievement of the MDGs. Here �ve pillars structurethe major constraints, whereby, the constraining institutional capacity andpotential lacks on �nancing should supplement the �ndings of the WorldBank Government of the Togolese Republic (2009). Other studies and re-ports align with these constraints OECD (2011f), African Development Bank& African Development Fund (2011). Interestingly, the IMF PRS ProgressReport points out a list of positive achievements regarding these constraints,e.g. lifting the phosphate sector constraint International Monetary Fund(2011f). Although the other constraints remain in place and the IMF under-lines three main challenges, the political stability, institutional capacity and�nancing for an ongoing good performance regarding the relaxing of bindingconstraints International Monetary Fund (2011f), (International MonetaryFund, 2011e, p. 5).

63

6.2 Organization of ECOWAS Institutions

Figure XXXX presents an overview of the ECOWAS institutions. This cre-ation of an overview on the institutional framework of the ECOWAS seemsto be an inevitable task as the literature does not present a comprehensiveorganizational overview.In the ECOWAS Treaty revision of 1993, the text includes a major obsta-cle of analyzing ECOWAS policy and politics: In chapter III, `Institutionsof the community under article 6', the text lists from a) to h) the mainECOWAS institutions but de�nes under i) as ECOWAS institution �anyother institutions that may be established by the Authority.� None of theo�cial ECOWAS publications or other publications provides a clear or atleast comprehensive structure. Thus, several documents had to be inter-linked to allow this overview-draft of ECOWAS and its institutions. It isworth emphasizing that this paper has its limits, too, thus, this overviewis most comprehensive in these limits and for sure not exhaustive. There

Figure 6.1: 1. draft, �gure not up to date: Overview of ECOWAS' institu-tions

are six main institutions in the ECOWAS: Authority of Heads of State andGovernment, Council of Ministers, ECOWAS Parliament, ECOWAS Courtof Justice, ECOWAS Commission, and specialized Technical Institutions andCommittees. The �rst and the second institution are the decision-making

64

bodies of ECOWAS. The Authority of Heads of State and Government ismade up of the heads of state and government of ECOWAS' member statesand, thus, constitutes the highest decision-making body. The Council ofMinisters serves as a governing board for the ECOWAS Commission. It isresponsible for minor decisions and for making recommendations �on anyaction aimed at achieving the region's objectives to the Authority of Headsof States and Governments�(ECOWAS, 2010c, p. 13). The third institutionis not yet fully operational, because the parliament has not been electedyet and its current members - appointed by the national parliaments - haveonly advisory roles. In contrast, the fourth institution, the ECOWAS courtof justice is operational and celebrated its 10th anniversary in 2011. TheECOWAS Commission is the major implementation body of ECOWAS pol-icy. Its president is the `Chief Executive O�cer of the Community'. It is theCommission that oversees policy strategies and politics (ECOWAS, 2010c).The commission has separate commissioners heading nine di�erent topic ar-eas, reaching from external relations to the commissioner of trade, customs, industry and free movement. They will be discussed in a separate section.To advise on special or strategic issues, eight special technical agencieswere established: the West African Health Organisation (WAHO), the WestAfrican Monetary Agency (WAMA), the West African Monetary Institute(WAMI), the ECOWAS Youth and Sports Development Centre (EYSDC),the ECOWAS Gender Development Centre (EGDC), the Water RessourcesCoordination Unit (WRCU), the ECOWAS BROWNCARD, theWest AfricanPower Pool (WAPP). Except for the Brown Card the �eld of activities ofthese agencies can be deduced from their names. The ECOWAS Brown Cardis an initiative to extend the national road accident insurances to the wholeregion. But the ECOWAS institutional framework is not complete with theseinstitutions. In addition, there are special institutions or initiatives to theECOWAS, such as: the Inter-Governmental Action Group against MoneyLaundering and Terrorism Financing in West Africa (GIABA), the WestAfrican Regional Health Programme (PRSAO), the ECOWAS Regional Cen-tre for Renewable Energy and Energy E�ciency(ECREEE), the ECOWASRegional Electricity Regulatory Authority (ERERA), the West African Com-mon Industrial Policy (WACIP) or the ECOWAS Bank for Investment andDevelopment (EBID). In this context, the EBID plays an important role asone of the major players concerning development strategies and �nancing.

65

6.3 Tables and Figures

66

Country name Document InstitutionGovernment of the Republic of Benin. 2011. “Growth and Poverty Reduction Strategy (GPRS) - 2011-2015.” GovernmentWorld Bank, ed. 2009. Benin - Constraints to growth and potential for diversification and innovation : country economic memorandum. Report No. 48233-BJ. Bretton WoodsWorld Bank. 2009. “Country Assistance Strategy for Burkina Faso for the Period FY 10-12.” Report No. 49588-BF. International Development Association, Internationale Finance Corporation; Multilateral Investment Guarantee Agency. http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2009/08/13/000334955_20090813031525/Rendered/PDF/495880CAS0P111101Official0Use0Only1.pdf. Bretton WoodsMinistère de l'Economie et des Finances de Burkina Faso. 2010. “Stratégie de croissance accélérée et de développement durable (SCADD) 2011-2015.” http://www.scadd2012.com/m-17-partenaires.html.

GovernmentAfrican Development Bank and African Development Fund. 2009. “Republic of Cape Verde. Country Strategy Paper 2009-2012.” http://www.afdb.org. OtherGovernment of the Republic of Cape Verde. 2011. “Programa do Governo. VIII Legislatura 2011-2016.” www.governo.cv. GovernmentGovernment of the Republic of Cape Verde. 2008. “Growth and Poverty Reduction Strategy Paper - II. 2008–11.” http://www-wds.worldbank.org. GovernmentWorld Bank. 2010. “Country Partnership Strategy for the Republic of Côte d'Ivoire for the Period FY10-FY13. Report No. 53666-CI.” International Development Association (Francophone Africa Country Cluster 2, AFCF2, Africa Region); International Finance Corporation (Sub-Saharan Africa Department); Multilateral Investment Guarantee Agency (Sub-Saharan Africa Department Bretton WoodsGovernment of the Republic of Côte d'Ivoire. 2012. “Le Plan National de Developpement (PND) 2012-2015.” GovernmentRepublic of The Gambia. 2011. “Programme for Accelerated Growth and Employment (PAGE) 2012 -2015.” Ministry of Finance and Economic Affairs. GovernmentUnited Nations Development Program (UNDP) and Government of the Republic of The Gambia. 2010. “Republic of The Gambia - Five Years from 2015, The Level of Achievement of the Millennium Development Goals (MDGs). Synthesized Report, 2010, The Gambia.” Ministry of Economic Planning and Industrial Development. http://www.gm.undp.org/mdgs intro gambia.htm OtherWorld Bank. 2008. “Joint Assistance Strategy for the Republic of The Gambia.” Report No. 42267-GM. International Development Association; African Development Bank. http://go.worldbank.org/SY3H1ONL10. AND World Bank. 2010. “Joint Assistance Strategy Progress Report for the Republic of The Gambia.” Report No: 55219-GM. International Development Association; African Development Bank. http://documents.worldbank.org/curated/en/2010/06/12525563/gambia-joint-assistance-strategy-progress report

Bretton WoodsGovernment of the Republic of Ghana. 2010. “Medium-Term National Development Policy Framework: Ghana Shared Growth And Development Agenda (GSGDA), 2010-2013. Volume I: Policy Framework.” National Development Planning Commission (NDPC). http://www.ndpc.gov.gh/. GovernmentLejárraga, Iza. 2010. “Roaring Tiger or Purring Pussycat: A Growth Diagnostics Study of Ghana. Paper prepared for the session on “Growth Diagnostics in Practice,” Annual Meeting of the American Economic Association, Atlanta, 4 January 2010.” African Other

Guinea Government of the Republic of Guinea. 2011. “Document de Strategie de Réduction de la pauvreté. DSRP (2011-2012).” Ministère de l’Economie et des Finances. http://www.srp-guinee.org/download/dsrp-2011-12/DSRP_2011-2012.pdf. Government

Guinea-Bissau Republic of Guinea-Bissau. 2011. “Second National Poverty Reduction Strategy Paper DENARP/PRSP II (2011–2015).” Ministry of Economy, Planning, and Regional Integration. http://www.imf.org/external/pubs/ft/scr/2011/cr11353.pdf. GovernmentWerker, Eric and Jasmina Beganovic. 2011. Liberia: A Case Study. International Growth Center Workshop on Growth in Fragile States.; African Development Bank and African Development Fund. 2008. Liberia. African Development Bank – World Bank Joint Assistance Strategy 2008-2011 And Eligibility To The Fragile States Facility. http://www.afdb.org. Bretton WoodsGovernment of Liberia. 2008. Poverty Reduction Strategy. http://www.mopea.gov.lr/. Government

Mali Government of the Republic of Mali. 2011. “CSCRP : Cadre Stratégique pour la Croissance et la Réduction de la Pauvreté (2012-2017).” http://www.mali-apd.org/spip.php?article6. Government

Niger Government of the Republic of Niger. 2007. ““Combating Poverty, a Challenge for All” Accelerated Development and Poverty Reduction Strategy 2008 - 2012.” Poverty Reduction Strategy, Second Generation. Prime Minister’s Office Prs Permanent Secretariat. http://www.imf.org/external/pubs/ft/scr/2008/cr08149.pdf. GovernmentGovernment of Nigeria. 2009. “Nigeria Vision 20: 2020; Economic Transformation Blueprint.” National Planning Commission. GovernmentWorld Bank. 2010. “Performance Assessement Review - World Bank Economic Reports on Growth Diagnostics in four African countries: Ghana, Mauritius, Nigeria, and Uganda. Report No.: 55404.” Country Evaluation and Regional Relations (IEGCR); Independent Evaluation Group (IEG). Bretton WoodsWorld Bank. 2007. “Nigeria Competitiveness and Growth Poverty Reduction and Economic Management 3 Country Department 12 Africa Region UK DFID. Country Economic Memorandum: Main Report.” Report No. 36483-NG II/III. Bretton WoodsMinistère de l'Economie et des Finances (MEF) de la Republique du Senegal. 2011. “Un peuple - un but - une foi - Document de Politique Economique et Sociale (DPES) 2011-2015. Placer le Sénégal sur la rampe de l'émergence.” Unité de Coordination et de Suivi de la Politique Economique (UCSPE).

GovernmentBanque Africaine de Développement and Fonds Africain de Développement. 2010. “République du Sénégal - Document de Stratégie par Pays 2010-2015.” Département des Opérations Pays Région Ouest. http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/SENEGAL%20-%20DSP%202010-2015.pdf. OtherMinistère de l'Economie et des Finances (MEF) de la Republique du Senegal. 2008. “Analyse des Contraintes à la croissance économique et au développement du secteur privé. Rapport final.” Mission de Formulation et Gestion du MCA Sénegal. GovernmentGovernment of Sierra Leone. “An Agenda for Change. Second Poverty Reduction Strategy (PRSP II) 2008-2012.” GovernmentPhillipson, Rachel. 2008. “Towards a Growth Diagnostic for Sierra Leone. A background Note for Poverty Reduction Strategy II (2008-2010).” DACO/DFID. & Chikezie, Chukwu-Emeka. “Will the Lion Ever Roar? Bridging the Gap between Policy Reforms, Political, andEntrepreneur-Led Growth in Sierra Leone.” In Economic Challenges and Policy Issues in Early 21st Century Sierra Leone. International Growth Centre (IGC), London School of Economics, ed. Johnson and Omotunde E. G. London, UK

OtherInternational Monetary Fund. 2011. “Togo: Poverty Reduction Strategy Paper—Progress Report—Joint Staff Advisory Note.” IMF Country Report No. 11/6. http://www.imf.org/external/pubs/ft/scr/2011/cr1106.pdf AND Togolese Republic. 2009. “Full Poverty Reduction Strategy Paper 2009-2011. Final Version.” http://www.imf.org/external/pubs/ft/scr/2010/cr1033.pdf. Bretton WoodsLundstrom, Susanna and Leonardo Garrido. “Togo growth diagnostics.” World Bank. Policy Research Working Paper. http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/12/21/000158349_20101221164522/Rendered/PDF/WPS5509.pdf / http://dx.doi.org/10.1596/1813-9450-5509. Other

Sierra Leone

Togo

Gambia

Ghana

Liberia

Nigeria

Benin

Burkina Faso

Cape Verde

Cote d'Ivoire

Senegal

Figure 6.2: Identifying constraints - basic literature

67

Main context Sub-level Constraints

GovernmentInadequate infrastructure

Energy1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 14 93%

GovernmentGovernment failure

Poor Governance + corruption 1 0 1 1 1 1 1 1 1 1 1 1 1 1 1 14 93%

GovernmentInadequate infrastructure

Transport - land1 1 0 1 1 1 1 1 1 0 1 1 1 1 1 13 87%

GovernmentGovernment failure

Barriers and costs of doing business 1 1 1 1 1 0 1 1 0 1 1 1 1 1 1 13 87%

GovernmentGovernment failure (and Market Failure)

Coordination failure0 1 1 1 1 1 1 0 1 1 1 1 1 1 1 13 87%

Private Sector and Investment

DiversificationDiversification (focus on export structure) 1 1 1 1 0 1 0 1 1 1 1 1 1 0 0 11 73%

GovernmentInadequate infrastructure

Transport - air1 1 0 1 0 1 0 1 1 1 0 1 1 1 0 10 67%

GovernmentInadequate infrastructure

Transport - water1 1 1 1 0 0 1 1 1 0 0 1 1 1 0 10 67%

Government Human capitalPoor education or educations system 1 0 1 0 1 0 1 1 1 1 1 1 0 1 0 10 67%

Overall environment for development

Stability Political instability1 1 0 1 0 0 1 1 1 1 0 1 0 1 1 10 67%

GovernmentInadequate infrastructure

Sanitation and drinking water 0 0 1 1 0 1 1 1 1 1 1 0 1 0 0 9 60%

Overall environment for development

Environmental risks

Environmental risks (internal risks and climate change) 1 1 1 0 1 1 0 0 0 1 1 1 0 0 0 8 53%

Overall environment for development

Environmental risks

Unsustainable natural resource exploitation 1 0 1 0 1 0 0 0 1 1 1 0 0 1 0 7 47%

Government Human capitalPoor health or health system 0 0 1 0 1 0 1 1 1 0 1 0 0 0 0 6 40%

Private Sector and Investment

Investment and financing

Poor quality of investment 0 1 0 1 1 0 0 0 0 0 1 1 1 0 0 6 40%

Private Sector and Investment

Market failuresLack of self discovery (innovation) 1 1 0 0 1 1 0 1 0 0 0 1 0 0 0 6 40%

GovernmentGovernment failure

Unsustainable government finance 0 0 1 1 1 0 0 0 0 1 0 1 0 0 1 6 40%

GovernmentInadequate infrastructure

Communication technologies 0 0 1 1 0 0 1 0 0 1 1 0 0 0 0 5 33%

Private Sector and Investment

Investment and financing

Low quantity of investment 0 0 0 1 0 1 0 1 1 0 0 0 0 1 0 5 33%

Private Sector and Investment

Investment and financing

Too high public investment (Public/private) 1 1 0 1 0 1 0 0 0 0 0 0 1 0 0 5 33%

GovernmentGovernment failure

High taxation1 0 1 0 1 0 0 0 0 0 1 1 0 0 0 5 33%

Overall environment for development

Stability

Poor institutions (rebuilding necessary, mostly post-conflict) 0 0 0 0 0 0 0 1 1 0 0 0 0 1 1 4 27%

Overall environment for development

Population growth

Population growth

1 0 0 0 1 0 0 0 0 1 1 0 0 0 0 4 27%Private Sector and Investment

Investment and financing

Financing (high cost of finance) 0 0 1 0 0 0 0 0 0 0 0 1 0 1 0 3 20%

Private Sector and Investment

Market failuresLow demand (due to small domestic market) 0 0 0 0 1 1 0 0 0 0 1 0 0 0 0 3 20%

GovernmentGovernment failure

Labor market rigidities 0 0 1 0 0 1 0 0 0 0 0 0 1 0 0 3 20%

Overall environment for development

Culture Culture0 0 0 0 1 1 0 0 0 0 1 0 0 0 0 3 20%

GovernmentGovernment failure

State owned firms0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 2 13%

GovernmentGovernment failures

Inadequate statistics

0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 2 13%

GMBDocumentCountry name

BEN BFA CPV CIV %GHA GIN GNB LBR MLI NER NGA SEN SLE TGO Total

Figure 6.3: Truth Table of development constraints to ECOWAS countries

68

Figure 6.4: Constraints by frequency - graphical overview

69

Main context Sub-level Constraints

GovernmentGovernment failure

Barriers and costs of doing business

1 1 1 1 1 0 1 1 0 1 1 1 1 1 1 13 87%

GovernmentGovernment failure

High taxation

1 0 1 0 1 0 0 0 0 0 1 1 0 0 0 5 33%

GovernmentGovernment failure

Labor market rigidities

0 0 1 0 0 1 0 0 0 0 0 0 1 0 0 3 20%

GovernmentGovernment failure

Poor Governance + corruption

1 0 1 1 1 1 1 1 1 1 1 1 1 1 1 14 93%

GovernmentGovernment failure

State owned firms0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 2 13%

GovernmentGovernment failure

Unsustainable government finance

0 0 1 1 1 0 0 0 0 1 0 1 0 0 1 6 40%

GovernmentGovernment failure (and Market Failure)

Coordination failure

0 1 1 1 1 1 1 0 1 1 1 1 1 1 1 13 87%

GovernmentGovernment failures

Inadequate statistics 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 2 13%

Government Human capitalPoor education or educations system 1 0 1 0 1 0 1 1 1 1 1 1 0 1 0 10 67%

Government Human capitalPoor health or health system

0 0 1 0 1 0 1 1 1 0 1 0 0 0 0 6 40%

GovernmentInadequate infrastructure

Communication technologies 0 0 1 1 0 0 1 0 0 1 1 0 0 0 0 5 33%

GovernmentInadequate infrastructure

Energy1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 14 93%

GovernmentInadequate infrastructure

Sanitation and drinking water 0 0 1 1 0 1 1 1 1 1 1 0 1 0 0 9 60%

GovernmentInadequate infrastructure

Transport - air1 1 0 1 0 1 0 1 1 1 0 1 1 1 0 10 67%

GovernmentInadequate infrastructure

Transport - land1 1 0 1 1 1 1 1 1 0 1 1 1 1 1 13 87%

GovernmentInadequate infrastructure

Transport - water

1 1 1 1 0 0 1 1 1 0 0 1 1 1 0 10 67%

Overall environment for development

Culture Culture

0 0 0 0 1 1 0 0 0 0 1 0 0 0 0 3 20%

Overall environment for development

Environmental risks

Environmental risks (internal risks and climate change)

1 1 1 0 1 1 0 0 0 1 1 1 0 0 0 8 53%

Overall environment for development

Environmental risks

Unsustainable natural resource exploitation

1 0 1 0 1 0 0 0 1 1 1 0 0 1 0 7 47%

Overall environment for development

Population growth

Population growth

1 0 0 0 1 0 0 0 0 1 1 0 0 0 0 4 27%

Overall environment for development

Stability Political instability

1 1 0 1 0 0 1 1 1 1 0 1 0 1 1 10 67%

Overall environment for development

Stability

Poor institutions (rebuilding necessary, mostly post-conflict)

0 0 0 0 0 0 0 1 1 0 0 0 0 1 1 4 27%

Private Sector and Investment

DiversificationDiversification (focus on export structure)

1 1 1 1 0 1 0 1 1 1 1 1 1 0 0 11 73%

Private Sector and Investment

Investment and financing

Financing (high cost of finance)

0 0 1 0 0 0 0 0 0 0 0 1 0 1 0 3 20%

Private Sector and Investment

Investment and financing

Low quantity of investment

0 0 0 1 0 1 0 1 1 0 0 0 0 1 0 5 33%

Private Sector and Investment

Investment and financing

Poor quality of investment

0 1 0 1 1 0 0 0 0 0 1 1 1 0 0 6 40%

Private Sector and Investment

Investment and financing

Too high public investment (Public/private) 1 1 0 1 0 1 0 0 0 0 0 0 1 0 0 5 33%

Private Sector and Investment

Market failuresLack of self discovery (innovation) 1 1 0 0 1 1 0 1 0 0 0 1 0 0 0 6 40%

Private Sector and Investment

Market failuresLow demand (due to small domestic market)

0 0 0 0 1 1 0 0 0 0 1 0 0 0 0 3 20%

GMBDocument

Country name

BEN BFA CPV CIV %GHA GIN GNB LBR MLI NER NGA SEN SLE TGO Total

Figure 6.5: Truth Table of development constraints to ECOWAS countries

70

Main context 0 / 1

Government Government failureBarriers and costs of doing business

1

Government Government failure High taxation 1Government Government failure Labor market rigidities 1Government Government failure Poor Governance + corruption 1

Government Government failure State owned firms 0

Government Government failureUnsustainable government finance

1

GovernmentGovernment failure (and Market Failure)

Coordination failure 1

Government Government failure Inadequate statistics 0

Government Human capitalPoor education or educations system

1

Government Human capital Poor health or health system 1Government Inadequate infrastructure Communication technologies 1Government Inadequate infrastructure Energy 1Government Inadequate infrastructure Sanitation and drinking water 1Government Inadequate infrastructure Transport - air 1Government Inadequate infrastructure Transport - land 1Government Inadequate infrastructure Transport - water 1Overall environment for development

Culture Culture 0

Overall environment for development

Environmental risksEnvironmental risks (internal risks and climate change)

1

Overall environment for development

Environmental risksUnsustainable natural resource exploitation

0

Overall environment for development

Population growth Population growth 1

Overall environment for development

Stability (political stability, peace, inner security)

Political instability 1

Overall environment for development

Stability (political stability, peace, inner security)

Poor institutions (rebuilding necessary, mostly post-conflict)

1

Private Sector and Investment DiversificationDiversification (focus on export structure)

1

Private Sector and Investment Investment and financing Financing (high cost of finance) 1Private Sector and Investment Investment and financing Low quantity of investment 1Private Sector and Investment Investment and financing Poor quality of investment 0

Private Sector and Investment Investment and financingToo high public investment (Public/private)

0

Private Sector and Investment Market failuresLack of self discovery (innovation)

1

Private Sector and Investment Market failuresLow demand (due to small domestic market)

1

Constraints

Figure 6.6: Regional constraints identi�ed by ECOWAS

71

Main context Sub-level Constraints

GovernmentGovernment failure

Barriers and costs of doing business

1 Existent (tangible results)

GovernmentGovernment failure

High taxation 1 Existent (limited tangible results)

GovernmentGovernment failure

Labor market rigidities

1 Existent (limited tangible results)

GovernmentGovernment failure

Poor Governance + corruption

1 Existent (tangible results)

GovernmentGovernment failure

State owned firms

0 Non-existent

GovernmentGovernment failure

Unsustainable government finance

1 Existent (tangible results)

GovernmentGovernment failure (and Market Failure)

Coordination failure

1 Existent (tangible results)

GovernmentGovernment failures

Inadequate statistics

0 Existent (tangible results)

Government Human capitalPoor education or educations system

1 Existent (tangible results)

Government Human capitalPoor health or health system

1 Existent (tangible results)

GovernmentInadequate infrastructure

Communication technologies

1 Existent (tangible results)

GovernmentInadequate infrastructure

Energy 1 Existent (tangible results)

GovernmentInadequate infrastructure

Sanitation and drinking water

1 Existent (tangible results)

GovernmentInadequate infrastructure

Transport - air 1 Existent (tangible results)

GovernmentInadequate infrastructure

Transport - land 1 Existent (tangible results)

GovernmentInadequate infrastructure

Transport - water 1 Existent (tangible results)

Overall environment for development

Culture Culture 0 Non-existent

Overall environment for development

Environmental risks

Environmental risks (internal risks and climate change)

1 Existent (tangible results)

Overall environment for development

Environmental risks

Unsustainable natural resource exploitation

0 Existent (tangible results)

Overall environment for development

Population growth

Population growth

1 Non-existent

Overall environment for development

Stability (political stability, peace, inner security)

Political instability

1 Existent (tangible results)

Overall environment for development

Stability (political stability, peace, inner security)

Poor institutions (rebuilding necessary, mostly post-conflict)

1 Existent (limited tangible results)

Private Sector and Investment

DiversificationDiversification (focus on export structure)

1 Existent (limited tangible results)

Private Sector and Investment

Investment and financing

Financing (high cost of finance)

1 Existent (limited tangible results)

Private Sector and Investment

Investment and financing

Low quantity of investment

1 Existent (limited tangible results)

Private Sector and Investment

Investment and financing

Poor quality of investment

0 Non-existent

Private Sector and Investment

Investment and financing

Too high public investment (Public/private)

0 Non-existent

Private Sector and Investment

Market failuresLack of self discovery (innovation)

1 Existent (tangible results)

Private Sector and Investment

Market failuresLow demand (due to small domestic market)

1 Existent (tangible results)

ConstraintsInstitutional response

Identified by

Figure 6.7: ECOWAS: Identi�ed constraints and institutional responses

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